SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
**********************************************************************
Date of Report (Date of earliest event reported): June 28, 1996
Merry Land & Investment Company, Inc.
(Exact name of registrant as specified in its charter)
Georgia 001-11081
(State or other jurisdiction of incorporation) (Commission File Number)
58-0961876
(I.R.S. Employer I.D. Number)
624 Ellis Street, Augusta, Georgia 30901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 706/722-6756
n/a
------------------------------------------------------------
(Former name or former address, if changed since last report)
**********************************************************************
Filed: July 15, 1996
<PAGE>
ITEM 5. OTHER EVENTS.
$100MM LINE OF CREDIT. The Company has entered into a $100 million
unsecured, revolving credit agreement (the "Credit Agreement") with the
Company's primary commercial bank with an effective date of June 28, 1996.
This renews the primary tranche of the Company's existing $160 million line
of credit. The Company is negotiating an additional credit facility. The
Credit Agreement provides the Company with a $100.0 million credit facility
for its general corporate purposes. Loans will bear interest (at the
Company's option) at either the Prime Rate or LIBOR plus 65 basis points.
The Credit Agreement contains certain covenants consistent with the
Company's other credit agreements, is for a term of 364 days and no amounts
are currently outstanding thereunder.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
CREDIT AGREEMENT. The Credit Agreement is attached hereto
as Exhibit 10.
==================================
Signature Blocks on Following Page
==================================
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Merry Land & Investment Company,
Inc. (Registrant)
By: /s/
- --------------------------------
Dorrie E. Green
As Its Vice President
<PAGE>
CREDIT AGREEMENT
DATED AS OF JUNE 28,1996
BETWEEN
MERRY LAND & INVESTMENT COMPANY, INC.,
THE LENDERS PARTY HERETO,
AND
FIRST UNION NATIONAL BANK OF GEORGIA, AS AGENT
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.2. GENERAL . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 1.3. OTHER DEFINITIONS AND PROVISIONS. . . . . . . . . . . .18
ARTICLE II - REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . . .19
SECTION 2.1. REVOLVING CREDIT LOANS. . . . . . . . . . . . . . . . .19
SECTION 2.2. PROCEDURE FOR ADVANCES OF LOANS . . . . . . . . . . . .19
SECTION 2.3. NOTES . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.4. OPTIONAL PERMANENT REDUCTION OF TOTAL COMMITMENT. . . .20
SECTION 2.5. TERMINATION AND EXTENSION OF TOTAL COMMITMENT . . . . .20
SECTION 2.6. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . .21
SECTION 2.7. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . .21
SECTION 2.8 EXPIRATION OR MATURITY DATE OF LETTERS OF CREDIT PAST
TERMINATION DATE. . . . . . . . . . . . . . . . . . . .24
SECTION 2.9. AMOUNT LIMITATIONS. . . . . . . . . . . . . . . . . . .25
ARTICLE III - GENERAL LOAN PROVISIONS. . . . . . . . . . . . . . . . . . .25
SECTION 3.1. INTEREST. . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 3.2. NOTICE AND MANNER OF CONVERSION OR CONTINUATION
OF LOANS. . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 3.3. COMMITMENT AND LETTER OF CREDIT FEES. . . . . . . . . .27
SECTION 3.4. MANNER AND APPLICATION OF PAYMENTS. . . . . . . . . . .28
SECTION 3.5. NATURE OF OBLIGATIONS OF LENDERS TO MAKE LOANS;
ASSUMPTION BY AGENT . . . . . . . . . . . . . . . . . .28
SECTION 3.6. CHANGED CIRCUMSTANCES . . . . . . . . . . . . . . . . .29
SECTION 3.7. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 3.8. CAPITAL REQUIREMENTS. . . . . . . . . . . . . . . . . .31
SECTION 3.9. TAXES . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 3.10. AGREEMENT REGARDING INTEREST AND CHARGES. . . . . . . .33
ARTICLE IV - CLOSING; CONDITIONS OF CLOSING AND BORROWING. . . . . . . . .33
SECTION 4.1. CLOSING . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 4.2. CONDITIONS OF INITIAL LOANS AND ADVANCES. . . . . . . .33
SECTION 4.3. CONDITIONS TO ALL LOANS, ADVANCES AND LETTERS
OF CREDIT . . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BORROWER . . . . . . . . . .36
SECTION 5.1. GENERAL REPRESENTATIONS AND WARRANTIES. . . . . . . . .36
SECTION 5.2. REPRESENTATIONS AND WARRANTIES AS TO
REAL PROPERTIES . . . . . . . . . . . . . . . . . . . .40
ARTICLE VI - FINANCIAL INFORMATION AND NOTICES . . . . . . . . . . . . . .42
SECTION 6.1. FINANCIAL STATEMENTS AND INFORMATION. . . . . . . . . .42
SECTION 6.2. ACCURACY OF INFORMATION . . . . . . . . . . . . . . . .46
ARTICLE VII - AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . .46
SECTION 7.1. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . .46
SECTION 7.2. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 7.3. CORPORATE AND PARTNERSHIP EXISTENCE, ETC. . . . . . . .47
SECTION 7.4. PAYMENT OF TAXES. . . . . . . . . . . . . . . . . . . .47
SECTION 7.5. INSURANCE . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 7.6. CONTINUANCE OF BUSINESS . . . . . . . . . . . . . . . .48
SECTION 7.7. CONTINUANCE OF MANAGEMENT . . . . . . . . . . . . . . .48
SECTION 7.8. ENVIRONMENTAL COVENANT. . . . . . . . . . . . . . . . .48
SECTION 7.9. MAINTENANCE, ETC. . . . . . . . . . . . . . . . . . . .49
SECTION 7.10. INTEREST EXPENSE. . . . . . . . . . . . . . . . . . . .49
SECTION 7.11. TANGIBLE NET WORTH. . . . . . . . . . . . . . . . . . .49
SECTION 7.12. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . .49
ARTICLE VIII - NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . .49
SECTION 8.1. INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . .49
SECTION 8.2. ENCUMBRANCES. . . . . . . . . . . . . . . . . . . . . .50
SECTION 8.3. SALE OF ASSETS. . . . . . . . . . . . . . . . . . . . .50
SECTION 8.4. MERGER. . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 8.5. PROPERTY ACQUISITION POLICY . . . . . . . . . . . . . .51
SECTION 8.6. CERTAIN INVESTMENTS PROHIBITED. . . . . . . . . . . . .52
SECTION 8.7. TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS. . . .52
SECTION 8.8. RESTRICTED PAYMENTS . . . . . . . . . . . . . . . . . .52
SECTION 8.9. DEVELOPMENT ACTIVITY. . . . . . . . . . . . . . . . . .53
SECTION 8.10. AMENDMENTS TO SENIOR NOTE AGREEMENT . . . . . . . . . .53
ARTICLE IX - DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . . .53
SECTION 9.1. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . .53
SECTION 9.2. REMEDIES. . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 9.3. RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC.. . . .56
SECTION 9.4. COLLATERAL ACCOUNT. . . . . . . . . . . . . . . . . . .56
ARTICLE X - THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 10.1. APPOINTMENT. . . . . . . . . . . . . . . . . . . . . .57
SECTION 10.2. DELEGATION OF DUTIES . . . . . . . . . . . . . . . . .57
SECTION 10.3. EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . .58
SECTION 10.4. RELIANCE BY AGENT. . . . . . . . . . . . . . . . . . .58
SECTION 10.5. NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . .58
SECTION 10.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. . . . . . . .59
SECTION 10.7. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . .59
SECTION 10.8. AGENT IN ITS INDIVIDUAL CAPACITY . . . . . . . . . . .60
SECTION 10.9. SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . .60
ARTICLE XI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 11.1. NOTICES. . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 11.2. EXPENSES . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 11.3. STAMP AND OTHER TAXES. . . . . . . . . . . . . . . . .61
SECTION 11.4. SET-OFF. . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 11.5. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . .62
SECTION 11.6. CONSENT TO JURISDICTION. . . . . . . . . . . . . . . .62
SECTION 11.7. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . .62
SECTION 11.8. REVERSAL OF PAYMENTS . . . . . . . . . . . . . . . . .63
SECTION 11.9. INJUNCTIVE RELIEF. . . . . . . . . . . . . . . . . . .63
SECTION 11.10. ACCOUNTING MATTERS. . . . . . . . . . . . . . . . . .63
SECTION 11.11. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. . . . . . . .63
SECTION 11.12. AMENDMENTS, WAIVERS AND CONSENTS. . . . . . . . . . .67
SECTION 11.13. PERFORMANCE OF BORROWER'S DUTIES. . . . . . . . . . .67
SECTION 11.14. INDEMNIFICATION . . . . . . . . . . . . . . . . . . .67
SECTION 11.15. ALL POWERS COUPLED WITH INTEREST. . . . . . . . . . .67
SECTION 11.16. SURVIVAL OF INDEMNITIES . . . . . . . . . . . . . . .67
SECTION 11.17. TITLES AND CAPTIONS . . . . . . . . . . . . . . . . .67
SECTION 11.18. SEVERABILITY OF PROVISIONS. . . . . . . . . . . . . .68
SECTION 11.19. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . .68
SECTION 11.20. TERM OF AGREEMENT . . . . . . . . . . . . . . . . . .68
SECTION 11.21. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . .68
SECTION 11.22. FIRST UNION NATIONAL BANK OF GEORGIA AS LENDER. . . .68
SECTION 11.23. LENDER CREDIT DECISION, ETC.. . . . . . . . . . . . .69
EXHIBIT A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
EXHIBIT B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
EXHIBIT C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
EXHIBIT D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
SCHEDULE 1TO ASSIGNMENT AND ACCEPTANCE . . . . . . . . . . . . . . . . . .78
SCHEDULE 5.1(c)MATERIAL ADVERSE CHANGES. . . . . . . . . . . . . . . . . .78
SCHEDULE 5.1(f)INDEBTEDNESS FOR BORROWED MONEY AND SECURED DEBT. . . . . .78
SCHEDULE 5.1(g)LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . .80
SCHEDULE 5.1(j)CONTINGENT LIABILITIES. . . . . . . . . . . . . . . . . . .80
SCHEDULE 5.1(m)SUBSIDIARIES AND OTHER INTERESTS. . . . . . . . . . . . . .80
SCHEDULE 5.1(n)CERTAIN CONTRACTS . . . . . . . . . . . . . . . . . . . . .80
SCHEDULE 5.1(o)AFFILIATE TRANSACTIONS. . . . . . . . . . . . . . . . . . .81
SCHEDULE 5.2(A)ENCUMBRANCES ON REAL PROPERTY . . . . . . . . . . . . . . .81
SCHEDULE 5.2(d)FLOOD INSURANCE EXCEPTIONS. . . . . . . . . . . . . . . . .81
SCHEDULE 5.2(g)INSPECTIONS AND PHYSICAL CONDITION. . . . . . . . . . . . .81
SCHEDULE 5.2(i)CONDEMNATION PROCEEDINGS. . . . . . . . . . . . . . . . . .81
SCHEDULE 8.2ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . . . . .82
SCHEDULE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of the 28th day of June, 1996 by and
among MERRY LAND & INVESTMENT COMPANY, INC., a Georgia corporation (the
"Borrower"), the Lenders who are or may become a party to this Agreement
(each, a "Lender" and collectively, the "Lenders") and FIRST UNION NATIONAL
BANK OF GEORGIA, a national banking association, in its capacity as agent
for the Lenders.
Statement of Purpose
--------------------
The Borrower has requested and the Lenders have agreed to extend a
revolving credit facility to the Borrower on the terms and conditions of
this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1. DEFINITIONS. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"AFFILIATE" of any Person means any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility
for administering, any Plan). A Person shall be deemed to be "controlled
by" any other Person if such other Person possesses, directly or
indirectly, power (a) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors
or managing general partners or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"AGENT" means First Union National Bank of Georgia, in its capacity as
agent for the Lenders hereunder and any successor agent appointed pursuant
to Section 10.9 hereof.
"AGENT'S OFFICE" means the office of the Agent specified in or
determined in accordance with the provisions of Section 11.1(c).
"AGREEMENT" means this Credit Agreement, as amended or supplemented
from time to time.
"APPLICABLE MARGIN" means (a) zero percent (0%) in the case of Prime
Rate Loans and (b) sixty-five one hundredths percent (.65%) in the case of
LIBOR Rate Loans.
"ASSET BACKED SECURITY" means any security that entitles the holder
thereof to receive all or a specified portion of, or to receive payments
based upon payments received on, the proceeds of financial assets
(including without limitation mortgage loans) , either fixed or revolving,
that by their terms convert into cash within a finite time period.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning assigned thereto in
Section 11.11.
"BORROWED MONEY" means any Indebtedness for or in respect of money
borrowed or raised (other than through the issuance of shares of capital
stock) (whether or not for cash consideration), by whatever means
(including acceptances, deposits and financial leases), or for the deferred
purchase price of assets or services (other than for assets or services
supplied to any Person in the ordinary course of business).
"BORROWER" means Merry Land & Investment Company, Inc., a Georgia
corporation, and its permitted successors and assigns.
"BORROWER EARNINGS" means the net earnings of the Borrower, determined
in accordance with generally accepted accounting principles, and in any
event (a) after Interest Expense and taxes but before depreciation or
amortization and (b) including any gains and subtracting any losses arising
from any sale, exchange or other disposition of capital assets, or from the
acquisition or retirement or sale of securities of the Borrower, and
measured over the period of time from September 30, 1993 through the most
recent full fiscal quarter of the Borrower as of the date the amount of
Borrower Earnings is being determined.
"BORROWER TOTAL ASSETS" means the total amount of assets which would
be included on a consolidated balance sheet of the Borrower and its
Subsidiaries under generally accepted accounting principles (less
applicable reserves and other properly deductible items), adjusted to
exclude the effect of any write-up in the book value of any asset since
December 31, 1995, after deducting therefrom: (a) all short-term
liabilities and liability items, except for indebtedness payable by its
terms more than one year from the date of incurrence thereof (or renewable
or extendible at the option of the obligor for a period ending more than
one year after such date of incurrence), (b) goodwill, (c) licenses,
patents, trademarks, trade names, copyrights, leasehold improvements not
recoverable at the expiration of a lease, and deferred charges (including,
but not limited to, unamortized debt discount and expense, organization
expenses, experimental and development expenses) and (d) all other items
which are properly classified as intangibles under generally accepted
accounting principles. In determining Borrower Total Assets, inventories
and securities shall be taken into account on the basis of cost or current
market value, whichever is lower.
"BUSINESS DAY" means (a) for all purposes other than as set forth in
clause (b) below, any day, other than a Saturday, Sunday or legal holiday,
on which banks in Georgia, North Carolina and New York are open for the
conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal
and interest on, any LIBOR Rate Loan, any day that is a Business Day
described in clause (a) and that is also a day for trading by and between
banks in U.S. Dollar deposits in the London interbank market.
"CAPITAL LEASE" means any leasing or similar arrangement that would be
classified as a capital lease under generally accepted accounting
principles, including without limitation any Sale Leaseback Transaction.
"CAPITAL LEASE OBLIGATION" means the total amounts payable under any
capital Lease.
"CASH EQUIVALENTS" means: (a) securities issued, guaranteed or insured
by the United States of America or any of its agencies with maturities of
not more than one year from the date acquired; (b) certificates of deposit
with maturities of not more than one year from the date acquired issued by
a United States federal or state chartered commercial bank of recognized
standing, which has capital and unimpaired surplus in excess of
$500,000,000 and which bank or its holding company has a short-term
commercial paper rating of at least A-2 or the equivalent by Standard &
Poor's Rating Group, a division of McGraw-Hill, Inc. ("S&P") or at least
P-2 or the equivalent by Moody's Investors Services, Inc. ("Moody's");
(c) reverse repurchase agreements with terms of not more than seven days
from the date acquired, for securities of the type described in clause (a)
above and entered into only with commercial banks having the qualifications
described in clause (b) above; (d) commercial paper issued by any Person
incorporated under the laws of the United States of America or any State
thereof and rated at least A-2 or the equivalent thereof by S&P or at least
P-2 or the equivalent thereof by Moody's, in each case with maturities of
not more than one year from the date acquired; and (e) investments in money
market funds registered under the Investment Company Act of 1940, which
have net assets of at least $500,000,000.00 and at least 85% of whose
assets consist of securities and other obligations of the type described in
clauses (a) through (d) above.
"CHANGE IN CONTROL" means (a) the individuals who are currently
directors and executive officers of the Borrower cease to own, in the
aggregate, the lesser of (i) 10% or (ii) 3,000,000 shares of the common
stock of the Borrower, (b) any one Person, together with such Person's
Affiliates, beneficially owns shares of the Borrower's common stock which
amount to 10% or more of Borrower's common stock on a fully diluted basis
(assuming the full exercise or conversion of all convertible securities,
warrants and all other options or agreements providing for the purchase or
subscription of the Borrower's common stock) (other than Persons currently
owning such common stock) or (c) the membership of the Board of Directors
of the Borrower changes (whether by addition of new members or replacement
of existing members) by more than two people, in the aggregate, in any
three consecutive years.
"CLOSING DATE" means the date of this Agreement or such later date on
which the Agent shall have determined that all conditions precedent set
forth in Article IV of this Agreement have been satisfied in full or
waived.
"CODE" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"COLLATERAL ACCOUNT" means a special non-interest bearing deposit
account maintained at the Principal Office of the Agent and under its sole
dominion and control.
"COMMISSION" means the Securities and Exchange Commission as from time
to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Agreement such Commission is not existing and
performing the duties now assigned to it under the Exchange Act, then the
Person performing such duties at such time.
"COMMITMENT" means, as to each Lender, such Lender's obligation to
make Loans pursuant to Section 2.1. and to issue (in the case of the Agent)
or participate in (in the case of the other Lenders) Letters of Credit
pursuant to Section 2.7 in an amount up to, but not exceeding, (but in the
case of the Agent excluding the aggregate amount of participations in the
Letters of Credit held by other Lenders) the amount equal to Lender's
Commitment Percentage times the Commitment, as the same may be reduced from
time to time pursuant to Section 2.4.
"COMMITMENT PERCENTAGE" means, with respect to any Lender, the
Commitment Percentage of the Loans, as set forth on SCHEDULE I hereto as
such Percentages may be modified from time to time pursuant to Section
11.11.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable (by direct or indirect agreement, contingent or
otherwise, or by operation of law (including without limitation by means of
joint venture or partnership arrangements), to provide funds for payment,
to supply funds to, or otherwise to invest in, a debtor, or otherwise to
assure a creditor against loss) upon or for (a) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the ordinary course of collection), (b) the
payment of dividends or other distributions upon the shares or other
securities of any other Person or (c) any undertaking of any other Person
(whether by agreement to purchase any obligations, stocks, assets, goods or
services, or to supply or advance any funds, assets, goods or services, or
otherwise). For the purposes of all computations made under this
Agreement, a Contingent Liability with respect to any Indebtedness shall be
deemed to be Indebtedness equal to the principal amount of such
Indebtedness, and a contingent Liability in respect of any other obligation
or liability or any dividend shall be deemed to be Indebtedness equal to
the maximum aggregate amount of such obligation, liability or dividend.
"DEFAULT" means any of the events specified in Section 9.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"DEVELOPMENT ACTIVITY" means (a) the development and construction of
multiple apartment complexes by the Borrower or any of its Subsidiaries,
(b) the financing by the Borrower or any of its Subsidiaries of any such
development or construction or (c) the incurrence by the Borrower or any of
its Subsidiaries of any Contingent Liabilities in connection with such
development or construction.
"DEVELOPMENT PHASE" means the time period, commencing with the date on
which the development and construction of any multiple apartment complex on
any real property owned by the Borrower and its Subsidiaries (the
"Project") commences and continuing through and including the date upon
which the Agent receives the following items: (a) copies of all
certificates of occupancy and permits necessary or desirable to operate the
Project, (b) copies of certificates of final completion of the Project from
the Project architects and engineers and the inspecting architects and
engineers certifying that the Project has been substantially completed in
accordance with the contracts and specifications, (c) a copy of the final
certified as-built survey of the Project, (d) a copy of the original
permanent hazard (flood) insurance policy for the Project, (e) verification
of physical occupancy of not less than 90% of the Project units by
residents qualified by the Borrower, (f) copies of the final contractors'
and developers' affidavits certifying complete and final payment of all
persons having provided any labor, materials or services to the Project,
(g) a copy of the endorsement to the title insurance policy insuring the
Project free of any Liens and (h) a copy of the notice and certification
from the developer that the Project has been completed to its satisfaction.
"DOLLARS" or "$" means the lawful currency of the United States of
America.
"EFFECTIVE DATE" means the later of: (a) the Agreement Date; and
(b) the date on which all of the conditions precedent set forth in Article
IV shall have been fulfilled or waived in writing by the Requisite Lenders.
"ELIGIBLE ASSIGNEE" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at
the time of such assignment (a) a commercial bank organized under the laws
of the United States, or any State thereof, having total capital and
surplus in excess of $500,000,000, (b) a finance company, insurance company
or other financial institution acceptable to the Agent which in the
ordinary course of business extends credit of the type extended hereunder
and that has total assets in excess of $200,000,000, (c) already a Lender
hereunder (whether as an original party to this Agreement or as the
assignee of another Lender), (d) the successor (whether by transfer of
assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, or (e) any other Person that has
been approved in writing as an Eligible Assignee by the Agent and the
Borrower.
"ENCUMBRANCE" means any mortgage, charge, lien, pledge, hypothecation,
assignment, deposit arrangement (excluding normal banking transactions) ,
security interest, sale pursuant to any repurchase agreement, any Capital
Lease (as to the lessee. thereunder) or other encumbrance of any nature
whatsoever.
"ENVIRONMENT" means any ambient air, workplace air, indoor air,
surface water, drinking water, groundwater, land surface strata, river
sediment, plant or animal life, natural resources, workplace, and real
property and the physical buildings, structures and fixtures thereon,
including without limitation sewer, septic and waste treatment, storage or
disposal systems.
"ENVIRONMENTAL CONDITION" means the release, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the Environment of any Hazardous
Material or the presence of any Hazardous Material at, in or on the
Environment (whether or not upon the real property which is owned or leased
by the Borrower or its Subsidiaries or other property of the Borrower or
its Subsidiaries and whether or not such pollution constituted at the time
thereof a violation of any Environmental Laws) as a result of which the
Borrower may become liable to any Person, may become subject to a
requirement for investigation or remediation or by reason of which the real
property which is owned or leased by the Borrower or any of its assets
reasonably may suffer or be subjected to any lien.
"ENVIRONMENTAL LAWS" means all applicable federal, state, local and
foreign laws, statutes, ordinances, regulations, standards, requirements,
interpretations, judgments, rulings, orders, permits, authorizations,
licenses, variances or waivers relating to health, safety, industrial
hygiene, Hazardous material or the Environment or imposing liability or
standards of conduct concerning any Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor statute, and the regulations
promulgated and the rulings issued thereunder.
"ERISA AFFILIATE" means each trade or business (whether or not
incorporated) which, together with the Borrower, is treated as a single
employer under Title IV of ERISA or Section 414 of the Code.
"EVENT OF DEFAULT" means any of the events specified in Section 9.1;
PROVIDED, that any requirement for passage of time, giving of notice or any
other condition has been satisfied.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the regulations
promulgated and the rulings issued thereunder.
"EXECUTIVE OFFICER" means the chief executive officer, chief financial
officer, secretary or any director of the Borrower.
"GOVERNMENTAL AUTHORITY" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any
other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity (including,
without limitation, the Federal Deposit Insurance Corporation, the
Comptroller of the Currency or the Federal Reserve Board, any central bank
or any comparable authority) or any arbitrator with authority to bind a
party at law.
"HAZARDOUS MATERIAL" means any flammable, explosive or radioactive
material, hazardous or toxic waste, hazardous, toxic or deleterious
substance or other such material and any other substance or material
defined or identified as a hazardous, toxic or deleterious substance,
material or waste pursuant to any Environmental Law, including without
limitation:
(i) Those substances included within the definition of
"hazardous substances," "hazardous materials," "toxic substances" or
"solid waste" in the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, and the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., as amended, and in
the regulations promulgated thereunder;
(ii) Those substances listed in the United States Department of
Transportation Table (49 CFR 172.101 and all amendments thereto) or by
the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and all amendments thereto);
(iii) Such other substances, materials and wastes which are
or become regulated under applicable local, state or federal law or
regulations; and
(iv) Any material, waste or substance which is (A) petroleum or
any fraction thereof, (B) asbestos, (C) polychlorinated biphenyls or
(D) designated as a "hazardous substance" pursuant to Section 311 of
the Clean Water Act, 33 U.S.C. Sections 1251 et seq. (33 U.S.C.
Section 1321 (A) (14)) or listed pursuant to Section 307 of the clean
Water Act (33 U.S.C. Section 1317), all as amended.
"HEDGING OBLIGATIONS" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest
rate cap, interest rate floor and interest rate collar agreements, and all
other agreements or arrangements entered into by such Person to protect
such Person against fluctuations in interest rates or currency exchange
rates.
"INDEBTEDNESS" means, with respect to any Person and without
duplication, (a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments; (b) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person; (c) Capital
Lease Obligations; (d) whether or not so included as liabilities in
accordance with generally accepted accounting principles, net liabilities
of such Person under all Hedging Obligations; (e) whether or not so
included as liabilities in accordance with generally accepted accounting
principles, all obligations of such Person to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid interest
thereon) secured by an Encumbrance on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse; (f) the amount
of the repurchase price in any repurchase transaction in which the Borrower
acts as seller; (g) all Underfunded Pension obligations; (h) all Contingent
Liabilities of such Person in respect of any of the foregoing; and
(i) amendments, renewals, extensions, modifications and refundings of any
of clauses (a) through (h). For all purposes of this Agreement, the
Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general partner or a
joint venturer.
"INSUFFICIENCY" means, at any time with respect to any Plan, the
amount, if any, by which (a) the present value of all benefits under such
Plan (determined as of such date on the basis of assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA), exceeds (b) the fair
market value (as of such date) of all assets of such Plan allocable to such
benefits (excluding any accrued but unpaid contributions).
"INTEREST EXPENSE" means, with respect to the period for which
Interest Expense is being determined, the total amounts payable by the
Borrower and its Subsidiaries for obligations in respect of interest (or
payments equivalent thereto) on Indebtedness (including interest on the
Notes) , as determined in accordance with generally accepted accounting
principles, and in any event including the interest component of rental
payments under any Capital Lease.
"INTEREST PERIOD" shall have the meaning assigned thereto in Section
3.1(b).
"ISSUING BANK FEES" means the fees payable to the Agent pursuant to
Section 3.3(b).
"LENDER" or "LENDERS" means each Lender shown on SCHEDULE I to this
Agreement and each Person that hereafter becomes a party to this Agreement
as a Lender pursuant to Section 11.11.
"LETTER OF CREDIT" has the meaning set forth in Section 2.7.
"LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of
Credit, collectively, any application therefor, any certificate or other
document presented in connection with a drawing under such Letter of Credit
and any other agreement, instrument or other document governing or
providing for (a) the rights and obligations of the parties concerned or at
risk with respect to such Letter of Credit or (b) any collateral security
for any of such obligations.
"LETTER OF CREDIT LIABILITIES" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the Stated
Amount of such Letter of Credit plus (b) the aggregate unpaid principal
amount of all Reimbursement Obligations of the Borrower at such time due
and payable in respect of all drawings made under such Letter of Credit.
For purposes of this Agreement, a Lender (other than the Agent in its
capacity as such) shall be deemed to hold a Letter of Credit Liability in
an amount equal to its participation interest in the related Letter of
Credit under Section 2.7, and the Agent shall be deemed to hold a Letter of
Credit Liability in an amount equal to its retained interest in the related
Letter of Credit after giving effect to the acquisition by the Lenders
other than the Agent of their participation interests under such Section.
"LIBOR RATE" means (a) LIBOR divided by (b) one (1) minus the Reserve
Percentage. For purposes of this definition: "LIBOR" means the rate for
deposits in Dollars which appears on the Telerate Page 3750 at
approximately 11:00 a.m. (London time) on the second Business Day next
preceding the first day of any Interest Period for a term equal to such
Interest Period; PROVIDED, that if, for any reason, such rate is not
available, such rate shall be the rate per annum at which, in the opinion
of Agent, Dollars in the amount of $5,000,000 are being offered to leading
reference banks for settlement in the London interbank market at
approximately 11:00 a.m. (London time), on the second Business Day next
preceding the first day of any Interest Period for a term equal to such
Interest Period; and "Reserve Percentage" means the daily arithmetic
reserve requirement imposed by the Board of Governors of the Federal
Reserve System (or any successor) under Regulation D on eurocurrency
liabilities (as defined in Regulation D) for the applicable Interest Period
as of the first day of such Interest Period, but subject only to any
changes in such reserve requirement becoming effective during the Interest
Period. For purposes of calculating the Reserve Percentage, the reserve
requirement shall be as set forth in Regulation D without benefit of credit
for prorations, exemptions or offsets under Regulation D, and further
without regard to whether or not any Lender elects to actually fund any
Loan or portion thereof with eurocurrency liabilities.
"LIBOR RATE LOAN" means any Loan bearing interest at a rate determined
with reference to the LIBOR Rate as provided in Section 3.1(a) hereof.
"LOAN" OR "LOANS" means the Loans made by the Lenders under the
Commitments.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Waiver Agreement and each other document, instrument and agreement executed
and delivered by the Borrower in connection with this Agreement or
otherwise referred to herein or contemplated hereby, all as amended or
supplemented from time to time.
"MAXIMUM RATE" shall have the meaning assigned thereto in Section
3.1(e).
"MULTIEMPLOYER PLAN" means, at any time, a "multiemployer plan" as
defined in Section 4001(a) (3) of ERISA to which the Borrower or any ERISA
Affiliate is then making or accruing an obligation to make contributions or
has within any of the preceding five plan years made or accrued an
obligation to make contributions, including for these purposes any Person
which ceased to be an ERISA Affiliate during such five-year period.
"MULTIPLE EMPLOYER PLAN" means, at any time, an employee benefit plan,
other than a Multiemployer Plan, subject to Title IV of ERISA to which the
Borrower or any ERISA Affiliate and more than one employer other than the
Borrower or any ERISA Affiliate is then making or accruing an obligation to
make contributions, has within any of the preceding five plan years made or
accrued an obligation to make contributions or, in the event that any such
plan has been terminated, to which the Borrower or any ERISA Affiliate made
or accrued an obligation to make contributions during any of the five plan
years preceding the date of termination of such plan, including for these
purposes any Person which ceased to be an ERISA Affiliate during such five-year
period.
"NOTE" or "NOTES" means the separate Notes made by the Borrower
payable to the order of each of the Lenders, substantially in the form of
EXHIBIT A hereto, evidencing the Loans, and any amendments, modifications
and supplements thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"NOTICE OF BORROWING" shall have the meaning assigned thereto in
Section 2.2(a) hereof and shall be in the form attached as EXHIBIT C.
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning assigned
thereto in Section 3.2 hereof and shall be in the form attached as
EXHIBIT D.
"OBLIGATIONS" means, in each case, whether now in existence or
hereafter arising: (a) the principal of the Loans, (b) the interest on
(including interest accruing after the filing of any bankruptcy or similar
petition) the principal of the Loans, and (c) all other fees (including
attorney's fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower to
the Lenders or to the Agent, of every kind, nature and description, direct
or indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any
note, and whether or not for the payment of money under or in respect of
this Agreement, any Note, or any of the other Loan Documents.
"OPERATING CASH FLOW" for any period shall mean the consolidated net
earnings of the Borrower and its Subsidiaries before Interest Expense,
income taxes and depreciation or amortization, determined in accordance
with generally accepted accounting principles (consistently applied);
PROVIDED, that in any event in determining such net earnings there shall
not be included in gross revenues of the Borrower and its Subsidiaries any
gain arising from any sale, exchange or other disposition of capital
assets, or from the acquisition or retirement or sale of securities of the
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto, or, if at any time such corporation or successor is not
existing and performing the function now assigned to it, then the Person
performing such function at such time.
"PERSON" means an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"PLAN" means, at any time, an employee benefit plan, other than a
Multiemployer Plan, which is subject to Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code or Section 302 of
ERISA, and either (a) is maintained for employees of the Borrower or any
ERISA Affiliate or in which any such employees participate or to which
contributions are made by the Borrower or any ERISA Affiliate, or (b) has
at any time within the preceding five years been maintained for employees
of the Borrower or of any ERISA Affiliate or any Person which was at such
time an ERISA Affiliate or in which any such employees participated at such
time, or (iii) with respect to which the Borrower or any ERISA Affiliate
could be subjected to any liability under Title IV of ERISA (including
without limitation Section 4069 of ERISA) in the event that such plan has
been or were to be terminated.
"PRIME RATE" means, at any time, the rate of interest per annum
publicly announced from time to time by the Agent as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business
on the day such change in the Prime Rate occurs. The parties hereto
acknowledge that the rate announced publicly by the Agent as its Prime Rate
is an index or base rate and shall not necessarily be its lowest rate
charged to its customers.
"PRIME RATE LOAN" means any Loan bearing interest at a rate determined
with reference to the Prime Rate as provided in Section 3.1(a) hereof.
"PRINCIPAL OFFICE" means the main office of the Agent located at 999
Peachtree Street, N.E., 9th Floor, Atlanta, Georgia 30309, Attention: Real
Estate Portfolio Management.
"PROPERTY INVESTMENT" means any fee interest, leasehold interest,
easement, profit, license or other interest in real property, Encumbrance
in favor of the Borrower or any of its Subsidiaries, or option to purchase
or acquire any of the foregoing.
"QUARTERLY DATE" means the last Business Day of March, June, September
and December in each year, the first of which shall be June 30, 1996.
"REGISTER" shall have the meaning assigned thereto in Section
11.11(d).
"REGULATORY CHANGE" means, with respect to any Lender, any change
effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender,
of or under any Applicable Law (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) by any
Governmental Authority or monetary authority charged with the
interpretation or administration thereof or compliance by any Lender with
any request or directive regarding capital adequacy.
"REIMBURSEMENT OBLIGATION" means the absolute, unconditional and
irrevocable obligation of the Borrower to reimburse the Agent for any
drawing honored by the Agent under a Letter of Credit.
"RELATED PERSON" of any Person means (a) a director, nominee for
election as a director, or officer of such Person, (b) if such Person is a
natural person, a member of the immediate family of such Person or of a
Related Person of such Person, (c) one who is a director or executive
officer of, or has an equity interest of greater than 10% in, any business
or professional entity that, during any of the three years prior to the
date on which the status of "Related Person" is being determined, (i) has
made payments for property or services to such Person in excess of 5% of
(A) such Person's consolidated gross revenues for any such year or (B) the
other entity's consolidated gross revenues for any such year, (ii) has
received from such Person payments for property or services in excess of 5%
of (A) such Person's consolidated gross revenues for any such year or
(B) the other entity's consolidated gross revenues for any such year, or
(iii) was the obligee of indebtedness of such Person in excess of 5% of
such Person's consolidated gross revenues for any such year.
"REQUIRED LENDERS" means, at any date, any combination of Lenders
whose Total Commitment Percentages aggregate at least 66-2/3%; PROVIDED,
that with respect to the exercise of any remedies hereunder after a Default
or Event of Default (including without limitation any actions taken
pursuant to Section 9.2), Required Lenders means any combination of Lenders
holding at least 66-2/3% of the aggregate outstanding principal amount of
the Loans.
"RESTRICTED PAYMENT" means (a) the payment of any dividend or
distribution on any class of share capital, other than a dividend or
distribution payable solely in shares of any class of share capital whose
rights would be in all respects junior to those of the Lenders, (b) the
repurchase, redemption or reduction of shares of any class of share capital
or any warrants, rights or options to purchase or acquire any shares of any
class of share capital, other than in exchange for or out of proceeds from
the substantially concurrent sale of other shares of any class of share
capital, (c) the prepayment, purchase or redemption of any indebtedness
subordinated to the Notes or any non-mandatory prepayment of any
Indebtedness ranking PARI PASSU with the Notes (including the Senior
Notes), (d) the payment of any amounts in respect of any partnership or
similar interest or in respect of any joint venture or other interest or in
respect of any contractual or other claim (whether arising by joint venture
agreement or otherwise) if the rights of the holder of such interest or
claim are junior to those of general creditors (other than payments to the
Borrower) or (e) the setting aside of funds for any of the foregoing
purposes.
"SALE-LEASEBACK TRANSACTION" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Borrower or any subsidiary of any part of property which has
been or is to be sold or transferred by the Borrower or any Subsidiary to
such Person (or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property).
"SECURED DEBT" means all Indebtedness which is secured by, contingent
upon, or associated with, any Encumbrance.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, or any successor statute, and the regulations promulgated and
the rulings issued thereunder.
"SECURITY" shall have the meaning assigned thereto in section 2(l) of
the Securities Act.
"SENIOR NOTES" means the 6.625% Senior Notes issued pursuant to the
Senior Note Agreements.
"SENIOR NOTE AGREEMENT" means the separate Note Purchase Agreements
dated as of September 30, 1993 between the Borrower and the financial
institutions named on the signature pages thereto (the "Noteholders"), as
modified by the Waiver Letter dated June 30, 1995 from each of the
Noteholders to the Borrower ("Waiver Letter").
"STATED AMOUNT" means the amount available to be drawn by a
beneficiary under a Letter of Credit from time to time, as such amount may
be increased or reduced from time to time in accordance with the terms of
such Letter of Credit.
"SUBSIDIARY" means any corporation, partnership, joint venture,
association, company, business trust or other entity in which the Borrower
directly or indirectly (a) beneficially owns or controls, directly or
indirectly, a majority of the outstanding voting securities having by the
terms thereof ordinary voting power to elect a majority of the board of
directors (or other body fulfilling a substantially similar function) of
such entity (irrespective of whether or not at the time any class or
classes of such voting securities shall have or might have voting power by
reason of the happening of any contingency) or (b) in the case of an entity
which does not have a board of directors (or other body fulfilling a
substantially similar function) has the authority to control the policies
of such entity (including any partnership or joint venture of or in which
the Borrower or a Subsidiary is a general partner or joint venture
participant or owns or has the right to obtain a majority of limited
partnership interests).
"SUBSIDIARY DEBT" means all Indebtedness of any Subsidiary of the
Borrower which is owed to any Person other than the Borrower.
"TANGIBLE NET WORTH" means, as of the date Tangible Net Worth is
determined, the sum of the amounts set forth on the consolidated balance
sheet of the Borrower and its Subsidiaries, prepared in accordance with
generally accepted accounting principles, as (a) the sum of (i) the par or
stated value of all outstanding capital stock and (ii) capital surplus and
cumulative undistributed net earnings, less (b) (i) any surplus or earnings
resulting from any write-up of assets subsequent to December 31, 1995,
(ii) goodwill, (iii) licenses, patents, trademarks, trade names,
copyrights, leasehold improvements not recoverable at the expiration of a
lease, and deferred charges (including, but not limited to, unamortized
debt discount and expense, organization expenses, experimental and
development expenses) and (iv) all other items which are properly
classified as intangibles under generally accepted accounting principles.
"TEMPORARY INVESTMENTS" means funds temporarily awaiting investment by
the Borrower and its Subsidiaries which are invested in one or more of the
following:
(a) obligations of, or guaranteed as to both full and timely payment
of principal and interest by, the United States or any agency or
instrumentality thereof when such obligations are backed by the full faith
and credit of the United States;
(b) Federal funds, certificates of deposit, time deposits and
bankers' acceptances, each of which shall not have an original maturity of
more than 90 days, of any depository institution or trust company
incorporated under the laws of the United States or any state; PROVIDED,
that the short-term obligations of such depository institution or trust
company shall be rated at least A-1+/P-1 by a "nationally recognized
statistical rating organization," as such term is applied in Rule l5c3-1
under the Exchange Act (a "Rating Agency");
(c) commercial paper (having original maturities of not more than 270
days) of any corporation incorporated under the laws of the United States
or any state thereof; PROVIDED, that such commercial paper shall be rated
at least A-1+/P-1 by a Rating Agency; and
(d) any money market fund rated AAAm/Aaa or AAA-G/Aaa by a Rating
Agency;
PROVIDED, that none of clauses (a) through (d) shall include any instrument
which evidences a right to receive only interest payments with respect to
the obligations underlying such instrument.
"TERMINATION DATE" means June 27, 1997 or such extended date as may be
provided in Section 2.5 hereof.
"TERMINATION EVENT" means (a) a "reportable event, as such term is
described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC), or an event
described in Section 4062(e) of ERISA, (b) the withdrawal of the Borrower
or any ERISA Affiliate from a Multiple Employer Plan during a plan year in
which it was a "substantial employer" (as such term is defined in Section
4001 (a) (2) of ERISA) or the incurrence of liability by the Borrower or
any ERISA Affiliate under Section 4064 of ERISA upon the termination of a
Multiple Employer Plan, (c) the filing of a notice of intent to terminate
any Plan under Section 4041 of ERISA, other than in a standard termination
within the meaning of Section 4041 of ERISA, or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, (d) the institution
by the PBGC of proceedings to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or cause a trustee to
be appointed to administer, any Plan or (e) the occurrence of any other
event or the existence of any other condition which could reasonably be
expected to give rise to a liability under Title IV of ERISA.
"TOTAL CAPITALIZATION" means the sum of all Indebtedness for Borrowed
Money, capital stock, surplus and premium on capital stock of the Borrower
and its Subsidiaries, all as shown on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with generally
accepted accounting principles applied on a consistent basis.
"TOTAL COMMITMENT" means the total of all Commitments in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000) as such
amount may be reduced from time to time pursuant to Section 2.4.
"TOTAL COMMITMENT PERCENTAGE" means, with respect to any Lender, the
Total Commitment Percentage set forth on SCHEDULE I hereto as such
Percentage may be modified from time to time pursuant to Section 11.11.
"TOTAL DEBT" means the aggregate amount of the Indebtedness of the
Borrower (including Indebtedness in respect of the Notes) plus any
Subsidiary Debt, as measured at the time Total Debt is determined.
"UNDERFUNDED PENSION OBLIGATIONS" means the sum of (a) the excess of
all "projected benefit obligations" of the Borrower and any Subsidiaries,
within the meaning of Financial Accounting Standard 87, over the fair
market value of assets held under the Borrower's defined benefit pension
plans and (b) the excess of the "accumulated post retirement benefit
obligations" of the Borrower and any Subsidiaries, within the meaning of
Financial Accounting Standard 106, over the fair market value of assets set
aside to provide for such obligations, all determined using the actuarial
assumptions for purposes of valuing such obligations used in the Borrower's
most recent financial statement, or, if no such assumptions are specified,
reasonable actuarial assumptions.
"WAIVER AGREEMENT" means the Waiver Agreement of even date herewith
executed by the Agent and Lenders in favor of the holders of the Senior
Notes.
"WITHDRAWAL LIABILITY" shall have the meaning given to such term under
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. GENERAL. All terms of an accounting nature not
specifically defined herein shall have the meaning assigned thereto by
generally accepted accounting principles. Unless otherwise specified, a
reference in this Agreement to a particular section, subsection, Schedule
or Exhibit is a reference to that section, subsection, Schedule or Exhibit
of this Agreement. Wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, the feminine and the neuter.
SECTION 1.3. OTHER DEFINITIONS AND PROVISIONS.
(a) USE OF CAPITALIZED TERMS. Unless otherwise defined therein, all
terms defined in this Agreement shall have the defined meanings when used
in the Notes and the other Loan Documents or any certificate, report or
other document made or delivered pursuant to this Agreement.
(b) MISCELLANEOUS. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
-------------------------
SECTION 2.1. REVOLVING CREDIT LOANS.
LOANS. Subject to the terms and conditions of this Agreement, each
Lender severally agrees to make Loans to the Borrower from time to time
from the Closing Date through the Termination Date as requested by the
Borrower in accordance with the terms of Section 2.2; PROVIDED, that
(i) the aggregate principal amount of all outstanding Loans (after giving
effect to any amount requested) and Stated Amounts of Letters of Credit
shall not exceed the Commitments and (ii) the principal amount of
outstanding Loans from any Lender to the Borrower and the Lender's
Commitment Percentage of outstanding Letters of Credit shall not exceed
such Lender's Commitment Percentage of the Commitments. Each Loan by a
Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Loans requested on each
occasion. Subject to the terms and conditions hereof, the Borrower may
borrow, repay and reborrow Loans hereunder until the Termination Date, upon
which date the entire outstanding principal balance of the Loans, together
with all accrued but unpaid interest thereon, shall be due and payable in
full.
SECTION 2.2. PROCEDURE FOR ADVANCES OF LOANS.
(a) REQUEST FOR BORROWING. The Borrower shall give the Agent
irrevocable prior written notice in the form attached hereto as EXHIBIT C
(a "Notice of Borrowing") not later than 10:00 a.m. (Eastern Standard Time)
at least (i) one Business Day before each Prime Rate Loan, and (ii) three
Business Days before each LIBOR Rate Loan, of its intention to borrow,
specifying (A) the date of such borrowing, which shall be a Business Day,
(B) the amount of such borrowing, which shall be with respect to any LIBOR
Rate Loan, an aggregate principal amount of $1,000,000 or any integral
multiple of $50,000 in excess thereof, (C) whether the Loans are to be
LIBOR Rate Loans or Prime Rate Loans, and (D) in the case of a LIBOR Rate
Loan, the duration of the Interest Period applicable thereto. The Agent
shall promptly notify the Lenders of the Notice of Borrowing.
(b) DISBURSEMENT OF LOANS. Not later than 2:00 p.m. (Eastern
Standard Time) on the proposed borrowing date, each Lender will make
available to the Agent, for the account of the Borrower, at the office of
the Agent in funds immediately available to the Agent, such Lender's
Commitment Percentage of the Loans to be made on such borrowing date. The
Borrower hereby irrevocably authorizes the Agent to disburse the proceeds
of each borrowing requested pursuant to this Section 2.2 in immediately
available funds by crediting such proceeds to a deposit account of the
Borrower maintained with the Agent or by wire transfer to such account as
may be agreed upon by the Borrower and the Agent from time to time.
Subject to Section 3.5 hereof, the Agent shall not be obligated to disburse
the proceeds of any Loan requested pursuant to this Section 2.2 until each
Lender shall have made available to the Agent its Commitment Percentage of
such Loan.
SECTION 2.3. NOTES.
NOTES. Each Loan and the obligation of the Borrower to repay such
Loan shall be evidenced by a Note in the form attached hereto as EXHIBIT A
payable to the order of each Lender representing the Borrower's obligation
to pay such Lender's Commitment Percentage of the aggregate unpaid
principal amount of all Loans made and to be made by such Lender to the
Borrower hereunder, plus interest and all other fees, charges and other
amounts due thereon. Each Note shall be dated the Closing Date and shall
be payable as to interest and fees as specified in Article III hereof.
SECTION 2.4. OPTIONAL PERMANENT REDUCTION OF TOTAL COMMITMENT. The
Borrower shall have the right at any time and from time to time, upon at
least five (5) Business Days prior written notice to the Agent, to
permanently reduce, in whole at any time or in part from time to time,
without premium or penalty, the Total Commitment in an aggregate principal
amount not less than $5,000,000 or any integral multiple of $1,000,000 in
excess thereof; PROVIDED, that each such permanent reduction shall be
accompanied by a prepayment of principal sufficient to reduce the
outstanding principal amount of the Loans after such reduction to the Total
Commitment as so reduced and by accrued interest on the amount so paid, and
provided further that the Total Commitment may not be reduced below the
Stated Amount of Letters of Credit outstanding. If the reduction of the
Total Commitment requires the repayment of any LIBOR Rate Loan, such
reduction may be made only on the last day of the then current Interest
Period applicable thereto.
SECTION 2.5. TERMINATION AND EXTENSION OF TOTAL COMMITMENT. The
Total Commitment shall terminate on the earliest of (a) the Termination
Date, (b) the date of permanent reduction in whole by the Borrower pursuant
to Section 2.4, and (c) the date of termination by the Agent on behalf of
the Lenders pursuant to Section 9.2(a); PROVIDED, that an or before the
sixtieth (60th) day, but not earlier than the ninetieth (90th) day, prior
to the Termination Date then in effect, the Borrower may, by written notice
(an "Extension Request") given to the Agent, request that the Termination
Date then in effect be extended to a date that is 364 days after the date
of issuance of the Extension Confirmation Notice (defined below). The
Agent shall promptly advise each Lender of its receipt of any Extension
Request. Each Lender may, in its sole discretion, consent to a requested
extension by giving written notice thereof to the Agent not later than the
Business Day (the "Extension Confirmation Date") immediately preceding the
date which is thirty-one (31) days after the date of the Extension Request.
No Lender shall be under any obligation or commitment to extend the
Termination Date beyond June 27, 1997 or any subsequently specified
Termination Date, and no such obligation or commitment on the part of any
Lender shall be inferred from the provisions of this Section 2.5. Failure
on the part of any Lender to respond to an Extension Request by the
applicable Extension Confirmation Date shall be deemed to be a denial of
such request by such Lender. The requested extension shall not be granted
if any Lender shall fail to consent in writing to such request. Promptly
following the applicable Extension Confirmation Date, the Agent shall
provide notice to the Borrower in writing as to whether the requested
extension has been granted (an "Extension Confirmation Notice") and, if
granted, such extension shall become effective upon the date of issuance of
such Extension Confirmation Notice. The Agent shall promptly thereafter
provide a copy of such Extension Confirmation Notice to each Lender. In no
event shall the term of this Agreement, after giving effect to any
extension of the Termination Date hereunder, exceed a period of 364 days.
SECTION 2.6. USE OF PROCEEDS. The Borrower shall use the proceeds of
the Loans solely (a) to finance the acquisition of apartment properties
(b) to finance Development Activity as permitted hereunder and (c) for
working capital and general corporate purposes; PROVIDED, that the proceeds
used for working capital and general corporate purposes shall not exceed
$10,000,000 at any time.
SECTION 2.7. LETTERS OF CREDIT.
(a) LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement, the Agent, on behalf of the Lenders, agrees to issue for the
account of the Borrower during the period from and including the Effective
Date to, but excluding, the Termination Date one or more letters of credit
(each a "Letter of Credit") up to a maximum aggregate Stated Amount at any
one time outstanding not to exceed the Commitment.
(b) TERMS OF LETTERS OF CREDIT. At the time of issuance, the amount,
form, terms and conditions of each Letter of Credit, and of any drafts or
acceptances thereunder, shall be subject to approval by the Agent and the
Borrower.
(c) REQUESTS FOR ISSUANCE OF LETTERS OF CREDIT. The Borrower shall
give the Agent written notice (or telephonic notice promptly confirmed in
writing) at least three Business Days prior to the requested date of
issuance of a Letter of Credit, such notice to describe in reasonable
detail the proposed terms of such Letter of Credit and the nature of the
transactions or obligations proposed to be supported by such Letter of
Credit, and in any event shall set forth with respect to such Letter of
Credit (i) the proposed initial Stated Amount, (ii) the beneficiary or
beneficiaries, (iii) whether such Letter of Credit is a commercial or
standby letter of credit and (iv) the proposed expiration date. The
Borrower shall also execute and deliver such customary letter of credit
application forms as requested from time to time by the Agent. Provided
the Borrower has given the notice prescribed by this Section 2.7 and
subject to Section 2.9. and the other terms and conditions of this
Agreement, including the satisfaction of any applicable conditions
precedent set forth in Article IV, the Agent shall issue the requested
Letter of Credit on the requested date of issuance for the benefit of the
stipulated beneficiary. Upon the written request of the Borrower, the
Agent shall deliver to the Borrower a copy of (i) any Letter of Credit
proposed to be issued hereunder prior to the issuance thereof and (ii) each
issued Letter of Credit within a reasonable time after the date of issuance
thereof. To the extent any term of a Letter of Credit Document is
inconsistent with a term of any Loan Document, the term of the Loan
Document shall control.
(d) REIMBURSEMENT OBLIGATIONS. Upon receipt by the Agent from the
beneficiary of a Letter of Credit of any demand for payment under such
Letter of Credit, the Agent shall promptly notify the Borrower of the
amount to be paid by the Agent as a result of such demand and the date on
which payment is to be made by the Agent to such beneficiary in respect of
such demand. The Borrower hereby unconditionally and irrevocably agrees to
pay and reimburse the Agent for the amount of each demand for payment under
such Letter of Credit at or prior to the date on which payment is to be
made by the Agent to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind. Upon receipt by the
Agent of any payment in respect of any Reimbursement Obligation, the Agent
shall promptly pay to each Lender that has acquired a participation therein
under the second sentence of Section 2.7(i) such Lender's Commitment
Percentage of such payment.
(e) MANNER OF REIMBURSEMENT. Upon its receipt of a notice referred
to in the immediately preceding subsection (d), the Borrower shall advise
the Agent whether or not the Borrower intends to borrow hereunder to
finance its obligation to reimburse the Agent for the amount of the related
demand for payment and, if it does, submit a timely Notice of Borrowing as
provided in Section 2.2.(a). If the Borrower fails to so advise the Agent,
or if the Borrower fails to reimburse the Agent for a demand for payment
under a Letter of Credit by the date of such payment, the Agent shall give
each Lender prompt notice of the amount of the demand for payment,
specifying such Lender's Commitment Percentage of the amount of the related
demand for payment. Borrower may not borrow hereunder to finance its
obligation to reimburse the Agent for the amount of the related demand on
or after the Termination Date.
(f) EFFECT OF LETTERS OF CREDIT ON COMMITMENTS. Upon the issuance by
the Agent of any Letter of Credit and until such Letter of Credit shall
have expired or been terminated, the Commitment of each Lender shall be
deemed to be utilized for all purposes of this Agreement in an amount equal
to such Lender's Commitment Percentage of the Stated Amount of such Letter
of Credit plus any related Reimbursement Obligations then outstanding.
(g) AGENT'S DUTIES REGARDING LETTERS OF CREDIT; UNCONDITIONAL NATURE
OF REIMBURSEMENT OBLIGATION. In examining documents presented in
connection with drawings under Letters of Credit and making payments under
such Letters of Credit against such documents, the Agent shall use the same
standard of care as it uses in connection with examining documents
presented in connection with drawings under letters of credit in which it
has not sold participations and making payments under such letters of
credit. The Borrower assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing,
neither the Agent nor any of the Lenders shall be responsible (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
issuance of or any drawing honored under any Letter of Credit even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit, or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telex,
telecopy or otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit, or of the proceeds thereof; (vii) for
the misapplication by the beneficiary of any such Letter of Credit, or the
proceeds of any drawing under such Letter of Credit; or (viii) for any
consequences arising from causes beyond the control of the Agent or the
Lenders. None of the above shall affect, impair or prevent the vesting of
any of the Agent's rights or powers hereunder. Any action taken or omitted
to be taken by the Agent under or in connection with any Letter of Credit,
if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create against the Agent any liability to the
Borrower or any Lender. In this connection, the obligation of the Borrower
to reimburse the Agent for any drawing made under any Letter of Credit
shall be absolute, unconditional and irrevocable and shall be paid strictly
in accordance with the terms of this Agreement under all circumstances
whatsoever, including without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit Document
or any term or provisions therein; (ii) any amendment or waiver of or any
consent to departure from all or any of the Letter of Credit Documents;
(iii) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against the Agent, any Lender, any
beneficiary of a Letter of Credit or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or in
the Letter of Credit Documents or any unrelated transaction; (iv) any
breach of contract or dispute between the Borrower, the Agent, any Lender
or any other Person; (v) any demand, statement or any other document
presented under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein or made in
connection therewith being untrue or inaccurate in any respect whatsoever;
(vi) any non-application or misapplication by the beneficiary of a Letter
of Credit of the proceeds of any drawing under such Letter of Credit;
(vii) payment by the Agent under the Letter of Credit against presentation
of a draft or certificate which does not strictly comply with the terms of
the Letter of Credit; and (viii) any other act, omission to act, delay or
circumstance whatsoever that might, but for the provisions of this Section,
constitute a legal or equitable defense to or discharge of the Borrower's
Reimbursement Obligations.
(h) AMENDMENTS, ETC. The issuance by the Agent of any amendment,
supplement or other modification to any Letter of Credit shall be subject
to the same conditions applicable under this Agreement to the issuance of
new Letters of Credit (including, without limitation, that the request
therefor be made through the Agent), and no such amendment, supplement or
other modification shall be issued unless either (i) the respective Letter
of Credit affected thereby would have complied with such conditions had it
originally been issued hereunder in such amended, supplemented or modified
form or (ii) the Required Lenders shall have consented thereto.
(i) LENDERS' PARTICIPATION IN LETTERS OF CREDIT. Immediately upon
the issuance by the Agent of any Letter of Credit each Lender shall be
deemed to have irrevocably and unconditionally purchased and received from
the Agent, without recourse or warranty, an undivided interest and
participation to the extent of such Lender's Commitment Percentage of the
liability of the Agent with respect to such Letter of Credit and each
Lender thereby shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be unconditionally obligated
to the Agent to pay and discharge when due, such Lender's Commitment
Percentage of the Agent's liability under such Letter of Credit. In
addition, upon the making of each payment by a Lender to the Agent in
respect of any Letter of Credit pursuant to the immediately following
subsection (j), such Lender shall, automatically and without any further
action on the part of the Agent or such Lender, acquire (i) a participation
in an amount equal to such payment in the Reimbursement Obligation owing to
the Agent by the Borrower in respect of such Letter of Credit and (ii) a
participation in a percentage equal to such Lender's Commitment Percentage
in any interest or other amounts payable by the Borrower in respect of such
Reimbursement Obligation (other than Issuing Bank Fees).
(j) PAYMENT OBLIGATION OF LENDERS. Each Lender severally agrees to
pay to the Agent on demand in immediately available funds in Dollars the
amount of such Lender's Commitment Percentage of each drawing paid by the
Agent under each Letter of Credit to the extent such amount is not
reimbursed by the Borrower pursuant to Section 2.7.(d). Each such Lender's
obligation to make such payments to the Agent under this subsection, and
the Agent's right to receive the same, shall be absolute, irrevocable and
unconditional and shall not be affected in any way by any circumstance
whatsoever, including without limitation, (i) the failure of any other
Lender to make its payment under this subsection; (ii) the financial
condition of the Borrower; (iii) the existence of any Default or Event of
Default; or (iv) the termination of the Commitments. Each such payment to
the Agent shall be made without any offset, abatement, withholding or
deduction whatsoever.
(k) INFORMATION TO LENDERS. Promptly following the end of each
calendar month in which any Letters of Credit are outstanding, the Agent
shall deliver to each Lender and the Borrower a notice describing the
aggregate amount of all Letters of Credit outstanding at the end of such
month. Upon the request of any Lender from time to time, the Agent shall
deliver any other information reasonably requested by such Lender with
respect to each Letter of Credit then outstanding. Other than as set forth
in this subsection, the Agent shall have no duty to notify the Lenders
regarding the issuance or other matters regarding Letters of Credit issued
hereunder. The failure of the Agent to perform its requirements under this
subsection shall not relieve any Lender from its obligations under
Section 2.2.(j).
(l) AGENT'S FEE. From the Letter of Credit Fees, Agent shall retain
one eighth thereof. Seven-eighths of the Letter of Credit fees shall be
distributed by the Agent to the Lenders in accordance with their respective
Commitment Percentages.
SECTION 2.8 EXPIRATION OR MATURITY DATE OF LETTERS OF CREDIT PAST
TERMINATION DATE. If the date (the "Facility Termination Date") after
which Borrower no longer has any right to obtain Loans under this Agreement
is prior to the expiration date of any Letters of Credit outstanding
hereunder (whether voluntarily, by reason of the occurrence of an Event of
Default or otherwise), the Borrower shall, on the Facility Termination
Date, deposit with the Agent an amount of money equal to the Stated Amount
of such Letter(s) of Credit in the Collateral Account. If a drawing
pursuant to such Letter of Credit occurs on or prior to the expiration date
of such Letter of Credit and after the Facility Termination Date, the
Borrower authorizes the Agent to use the monies deposited in the Collateral
Account to make payment to the beneficiary with respect to such drawing or
the payee with respect to such presentment. If no drawing occurs on or
prior to the expiration date of such Letter of Credit, the Agent shall
return to the Borrower the monies deposited in the Collateral Account with
respect to such outstanding Letter of Credit on or before the date thirty
Business Days after the expiration date of such Letter of Credit.
Notwithstanding the fact that Lenders shall have no further obligation to
make Loans nor shall the Agent issue Letters of Credit, the terms and
provisions of this Agreement shall continue to be binding beyond the
Termination Date or Facility Termination Date if there are Letters of
Credit outstanding on the Facility Termination Date or Termination Date.
SECTION 2.9. AMOUNT LIMITATIONS. Notwithstanding any other term of
this Agreement or any other Loan Document, at no time may the aggregate
principal amount of all Loans, together with the aggregate amount of all
Letter of Credit Liabilities, exceed the aggregate amount of the Commitment
as in effect from time to time.
ARTICLE III
GENERAL LOAN PROVISIONS
------------------------
SECTION 3.1. INTEREST.
(a) INTEREST RATE OPTIONS. Subject to the provisions of this Section
3.1, at the election of the Borrower, the aggregate principal balance of
the Notes or any portion thereof shall bear interest at the Prime Rate or
the LIBOR Rate PLUS, in each case, the Applicable Margin. The Borrower
shall select the rate of interest and Interest Period, if any, applicable
to any Loan at the time a Notice of Borrowing is given pursuant to Sections
2.2 or at the time a Notice of Conversion/Continuation is given pursuant to
Section 3.2. Each Loan or portion thereof bearing interest based on the
Prime Rate shall be a "Prime Rate Loan", and each Loan or portion thereof
bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan". Any
Loan or portion thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Prime Rate Loan.
On the date hereof, the Prime Rate is 8.25% and therefore the rate of
interest in effect hereunder for Prime Rate Loans outstanding on the date
hereof, expressed in simple interest terms, is 8.25% per annum. On the
date hereof, the LIBOR Rate (for an Interest Period equal to one month) is
5.49609% and therefore the rate of interest in effect hereunder for LIBOR
Rate Loans outstanding on the date hereof, expressed in simple interest
terms, is 6.14609% per annum.
(b) INTEREST PERIODS. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 3.1(a) , shall
elect an interest period (each, an "Interest Period") to be applicable to
such Loan, which Interest Period shall be a period of one, two or three
months; PROVIDED, that:
(i) each Interest Period shall commence on the date of advance
or conversion of any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall
commence on the date on which the next preceding Interest Period
expires;
(ii) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, that if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iv) no Interest Period shall extend beyond the Termination Date
then in effect and there shall be no more than five (5) Interest
Periods in effect at any time.
(c) DEFAULT RATE. Upon the occurrence and during the continuance of
an Event of Default, (i) the Borrower shall no longer have the option to
request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall bear
interest at a rate per annum two percent (2%) in excess of the then
applicable rate until the end of the applicable Interest Period and
thereafter at the Prime Rate plus two percent (2%), and (iii) all
outstanding Prime Rate Loans shall bear interest at the Prime Rate plus two
percent (2%); PROVIDED, that in no event shall the default rate be less
than the default rate on the Senior Notes. Interest shall continue to
accrue on the Notes after the filing by or against the Borrower of any
petition seeking any relief in bankruptcy or under any act or law
pertaining to insolvency or debtor relief, whether state, federal or
foreign.
(d) INTEREST PAYMENT AND COMPUTATION. Interest on each Prime Rate
Loan shall be payable in arrears on the last Business Day of each calendar
quarter commencing June 30, 1996. Interest on each LIBOR Rate Loan shall
be payable in arrears on the last day of each Interest Period applicable
thereto. All interest rates and fees provided hereunder shall be computed
on the basis of a 360 day year and assessed for the actual number of days
elapsed (unless reference to a 365 or 366-day year is necessary in order
not to exceed the maximum rate set forth in subsection (e) below).
(e) MAXIMUM RATE. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the
Notes charged or collected pursuant to the terms of this Agreement or
pursuant to any of the Notes exceed the highest rate permissible under any
applicable law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a court
determines that the Lenders have charged or received interest hereunder in
excess of the highest applicable rate, the rate in effect hereunder shall
automatically be reduced to the maximum rate permitted by applicable law
and the Lenders shall promptly refund to the Borrower on a pro rata basis
any interest received by Lenders in excess of the maximum lawful rate or,
if so requested by Borrower, shall apply such excess to the principal
balance of the Obligations. It is the intent hereof that the Borrower not
pay or contract to pay, and that neither Agent nor any Lender receive or
contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrower under
applicable law. For the purpose of determining whether or not interest in
excess of the highest rate permissible under any applicable law has been
charged or collected, all interest at any time contracted for, charged or
received from the Borrower in connection with any of the Loan Documents
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of the
Obligations.
SECTION 3.2. NOTICE AND MANNER OF CONVERSION OR CONTINUATION OF
LOANS. Provided that no Default or Event of Default has occurred and is
then continuing, the Borrower shall have the option to (a) convert at any
time all or any portion of its outstanding Prime Rate Loans in a principal
amount equal to $1,000,000 or any integral multiple of $50,000 in excess
thereof into one or more LIBOR Rate Loans, and (b) upon the expiration of
any Interest Period, convert all or any part of its outstanding LIBOR Rate
Loans into Prime Rate Loans or to continue such LIBOR Rate Loans as LIBOR
Rate Loans. Whenever the Borrower desires to convert or continue Loans as
provided above, the Borrower shall give the Agent irrevocable prior written
notice in the form attached as EXHIBIT D (a "Notice of
Conversion/Continuation") not later than 11:00 a.m. (Eastern Standard Time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (i) the Loans to be
converted or continued, and, in the case of a LIBOR Rate Loan to be
converted or continued, the last day of the Interest Period therefor,
(ii) the effective date of such conversion or continuation (which shall be
a Business Day), (iii) the principal amount of such Loans to be converted
or continued, and (iv) the Interest Period to be applicable to such
converted or continued LIBOR Rate Loan. The Agent shall promptly notify
the Lenders of such Notice of Conversion/Continuation.
SECTION 3.3. COMMITMENT AND LETTER OF CREDIT FEES.
(a) COMMITMENT FEE. The Borrower shall pay to the Agent, for the
account of each Lender, a non-refundable commitment fee at a rate per annum
equal to one-quarter percent (1/4%) on the average daily unused portion of
the Commitment. For purposes of this Section, the Stated Amount of Letters
of Credit outstanding shall be considered used portions of the Commitment.
The commitment fees due hereunder shall be payable in arrears on the last
Business Day of each calendar quarter during the term of this Agreement
commencing June 30, 1996, and on the Termination Date. Such commitment
fees shall be distributed by the Agent to the Lenders in accordance with
the their respective Commitment Percentages.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to the Agent
for the account of each Lender, subject to Section 2.7(l) hereof, a letter
of credit fee at a rate per annum equal to one percent (1%) of the Stated
Amount of each Letter of Credit, payable annually in advance. The fee
provided for in the immediately preceding sentence shall be nonrefundable
and, after the initial payment for each Letter of Credit, shall be paid on
each anniversary date thereof. The Borrower shall pay directly to the
Agent from time to time on demand all commissions, charges, costs and
expenses in the amounts customarily charged by the Agent from time to time
in like circumstances with respect to the issuance of each Letter of
Credit, drawings, amendments and other transactions relating thereto. To
the extent that Letters of Credit are outstanding on the Termination Date
or Facility Termination Date, letter of credit fees shall continue to be
paid on each anniversary date.
SECTION 3.4. MANNER AND APPLICATION OF PAYMENTS. Each payment
(including prepayments) by the Borrower on account of the principal of or
interest on the Loans or of any fee or other amounts payable to the Agent
or the Lenders under this Agreement or any Note shall be made not later
than 1:00 p.m. (Eastern Standard Time) on the date specified for payment
under this Agreement to the Agent, at the Agent's Office, in Dollars, in
immediately available funds and shall be made without any set-off,
counterclaim or deduction whatsoever. Any payment received after such time
but before 5:00 p.m. (Eastern Standard Time) on such day shall be deemed a
payment on such date for the purposes of Section 9.1, but for all other
purposes shall be deemed to have been made on the next succeeding Business
Day. If any payment under this Agreement or any Note shall be specified to
be made upon a day which is not a Business Day, it shall be made on the
next succeeding day which is a Business Day and such extension of time
shall in such case be included in computing interest, if any, in accordance
with such payment. Each payment by the Borrower shall be applied (i) FIRST
to any fees and expenses then due the Agent hereunder, (ii) SECOND pro-rata
to any commitment fees then due and payable under the Commitment,
(iii) THIRD pro-rata to any interest then due and payable on the Loans, and
(iv) FOURTH to the principal of the Loans.
SECTION 3.5. NATURE OF OBLIGATIONS OF LENDERS TO MAKE LOANS;
ASSUMPTION BY AGENT. The obligations of the Lenders under this Agreement
to make the Loans are several and are not joint or joint and several.
Unless the Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Agent such Lender's ratable portion of the amount to be borrowed on such
date, the Agent may assume that such Lender has made such portion available
to the Agent on the proposed borrowing date in accordance with Section 2. 2
(b) and the Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent
such Lender shall not have so made such ratable portion available to the
Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest
thereon at the rate then applicable to such amount, for each day from the
date such amount is made available to the Borrower until the date such
amount is repaid to the Agent. If such Lender shall repay to the Agent
such corresponding amount, the amount so repaid shall constitute such
Lender's Commitment Percentage of the Loan made on such borrowing date for
purposes of this Agreement. The failure of any Lender to make its
Commitment Percentage of any Loan available shall not relieve it or any
other Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Loan available on such borrowing date, but no Lender
shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Loan available on the borrowing date.
SECTION 3.6. CHANGED CIRCUMSTANCES.
(a) CIRCUMSTANCES AFFECTING LIBOR RATE AVAILABILITY. If, with
respect to any Interest Period, the Agent or the Lenders (after
consultation with the Agent) shall determine that, by reason of
circumstances affecting the foreign exchange and interbank markets
generally, deposits in eurodollars in the applicable amounts are not being
offered to the Agent or any Lender for such Interest Period, then the Agent
shall forthwith give notice thereof to the Borrower. Thereafter, until the
Agent notifies the Borrower that such circumstances no longer exist, the
obligation of the Lenders to make LIBOR Rate Loans, and the right of the
Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan,
shall be suspended, and the Borrower shall repay in full (or cause to be
repaid in full) the then outstanding principal amount of each such LIBOR
Rate Loan, together with accrued interest thereon, on the last day of the
then current Interest Period applicable to such LIBOR Rate Loan or convert
the then outstanding principal amount of each such LIBOR Rate Loan to a
Prime Rate Loan as of the last day of such Interest Period.
(b) LAWS AFFECTING LIBOR RATE AVAILABILITY. If, after the date
hereof, the introduction of, or any change in, any applicable law or in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of
their respective lending offices) with any request or directive (whether or
not having the force of law) of any such governmental authority, central
bank or comparable agency, shall make it unlawful or impossible for any
Lender (or any of its lending offices) to honor its obligations hereunder
to make or maintain any LIBOR Rate Loan, such Lender shall forthwith give
notice thereof to the Agent. Thereafter, until the Agent notifies the
Borrower that such circumstances no longer exist, (i) the obligations of
the Lenders to make LIBOR Rate Loans and the right of the Borrower to
convert any Loan or continue any Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrower may select only Prime Rate Loans
hereunder, and (ii) if any of the Lenders may not lawfully continue to
maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto, the applicable LIBOR Rate Loan shall immediately be
converted to a Prime Rate Loan for the remainder of such Interest Period.
For purposes of this Section 3.6(b), a change in law, rule, regulation,
interpretation or administration shall include, without limitation, any
change made or which becomes effective on the basis of a law, rule,
regulation, interpretation or administration presently in force, the
effective date of which change is delayed by the terms of such law, rule,
regulation, interpretation or administration.
(c) INCREASED COST OF LIBOR RATE LOANS; ADDITIONAL COSTS IN RESPECT
OF LETTERS OF CREDIT. If, after the date hereof, the introduction of, or
any change in, any applicable law or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective
lending offices) with any request or directive (whether or not having the
force of law) of such governmental authority, central bank or comparable
agency:
(i) shall subject any of the Lenders (or any of their respective
lending offices) to any tax, duty or other charge with respect to any
LIBOR Rate Loan or any Note or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective lending
offices) of the principal of or interest on any LIBOR Rate Loan or any
Note or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net income of
any of the Lenders or any of their respective lending offices imposed
by the jurisdiction in which such Lender's principal executive office
or lending office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective lending
offices) or shall impose on any of the Lenders (or any of their
respective lending offices) or the foreign exchange and interbank
markets any other condition affecting any LIBOR Rate Loan or any of
the Notes;
(iii) without limiting the obligations of the Borrower under
the preceding subsections of this Section (but without duplication),
if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any
Governmental Authority there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit, capital adequacy or
similar requirement against or with respect to or measured by
reference to Letters of Credit and the result shall be to increase the
cost to the Agent of issuing (or any Lender purchasing participations
in) or maintaining its obligation hereunder to issue (or purchase
participations in) any Letter of Credit or reduce any amount
receivable by the Agent or any Lender hereunder in respect of any
Letter of Credit, then, upon demand by the Agent or such Lender, the
Borrower shall pay immediately to the Agent for its account or the
account of such Lender, as applicable, from time to time as specified
by the Agent or a Lender, such additional amounts as shall be
sufficient to compensate the Agent or such Lender for such increased
costs or reductions in amount.
and the result of any of the foregoing is to increase the cost to any of
the Lenders of maintaining any LIBOR Rate Loan or to reduce the amount of
any sum received or receivable by any of the Lenders under this Agreement
or under the Notes in respect of a LIBOR Rate Loan, then such Lender shall
promptly notify the Agent, and the Agent shall promptly notify the Borrower
of such fact and demand compensation therefor and, within fifteen (15)
Business Days after such notice by Agent, the Borrower agrees to pay to
such Lender such additional amount or amounts as will compensate such
Lender f or such increased cost or reduction. The Agent will promptly
notify the Borrower of any event of which it has knowledge which will
entitle any Lender to compensation pursuant to this Section 3.6(c);
PROVIDED, that the Agent shall incur no liability whatsoever to the Lenders
or the Borrower in the event it fails to do so. A certificate of Agent
setting forth the basis for determining such additional amount or amounts
necessary to compensate any such Lender or Lenders shall be conclusively
presumed to be correct save for manifest error. For purposes of this
Section, a change in applicable law, interpretation, administration,
request or directive shall include, without limitation, any change made or
which becomes effective on the basis of a law, rule, regulation,
interpretation, administration, request or directive presently in force,
the effective date of which change is delayed by the terms of such law,
rule, regulation, interpretation, administration, request or directive.
SECTION 3.7. INDEMNITY. The Borrower hereby indemnifies each of the
Lenders against any loss or expense which may arise or be attributable to
each Lender's obtaining, liquidating or employing deposits or other funds
acquired to effect, fund or maintain the Loans (a) as a consequence of any
failure by the Borrower to make any payment when due of any amount due
hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of
the Borrower to borrow an a date specified therefor in a Notice of
Borrowing or (c) due to any payment, prepayment or conversion of any LIBOR
Rate Loan on a date other than the last day of the Interest Period
therefor. Such loss or expense shall be calculated based upon the present
value of payments due from the Borrower with respect to a deposit obtained
by any of the Lenders in order to fund such LIBOR Rate Loan to the
Borrower. Each Lender shall notify the Borrower of, and provide the
Borrower with calculations of, any such loss or expense and, within fifteen
(15) Business Days after such notice, the Borrower agrees to pay to such
Lender such additional amount or amounts as will compensate such Lender for
such loss or expense.
SECTION 3.8. CAPITAL REQUIREMENTS. If either (a) the introduction
of, or any change in, or in the interpretation of, any applicable law or
(b) compliance with any guideline or request from any central bank or
comparable agency or other governmental authority (whether or not having
the force of law), has or would have the effect of reducing the rate of
return on the capital of, or has affected or would affect the amount of
capital required to be maintained by, any Lender or any corporation
controlling such Lender as a consequence of, or with reference to such
Lender's commitments hereunder and other commitments of this type, below
the rate which the Lender or such other corporation could have achieved but
for such introduction, change or compliance, then within fifteen (15)
Business Days after written demand by any such Lender, the Borrower shall
pay to such Lender from time to time as specified by such Lender additional
amounts sufficient to compensate such Lender or other corporation for such
reduction.
SECTION 3.9. TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by the Borrower
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect
thereto excluding (i) in the case of each Lender and the Agent, taxes
imposed upon its income and franchise taxes imposed upon it by the
jurisdiction under the laws of which such Lender or the Agent (as the case
may be) is organized or is or should be qualified to do business or any
political subdivision thereof, and (ii) in the case of each Lender, taxes
imposed upon its income and franchise taxes imposed upon it by the
jurisdiction of such Lender's lending office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any Lender or the
Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.9), such Lender or the Agent
(as the case may be) receives an amount equal to the amount such party
would have received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance
with applicable law, and (iv) the Borrower shall deliver to the Agent
evidence of such payment to the relevant taxing authority or other
authority in the manner provided in Section 3.9(d).
(b) STAMP AND OTHER TAXES. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or
any other similar fees or charges or excise or property taxes (other than
excise and property taxes to which the Agent or any Lender would have been
subject in the absence of this Agreement) and any levies of the United
States or any state or political subdivision thereof or any applicable
foreign jurisdiction which arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to,
this Agreement, the Loans, the Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) INDEMNITY. The Borrower shall indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 3.9) paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be made within fifteen (15) Business Days from the
date the Lender or the Agent (as the case may be) makes written demand
therefor.
(d) EVIDENCE OF PAYMENT. Within thirty (30) days after the date of
any payment of Taxes or Other Taxes, the Borrower shall furnish to the
Agent, at its address referred to in Section 11.1, the original or a
certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Agent.
(e) DELIVERY OF TAX FORMS. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall
deliver to the Borrower, with a copy to the Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance,
as applicable, (i) two United States Internal Revenue Service Forms 4224 or
Forms 1001, as applicable, (or successor forms) properly completed and
certifying in each case that such Lender is entitled to a complete
exemption from withholding or deduction for or on account of any United
States federal income taxes, and (ii) an Internal Revenue Service Form W-8
or W-9 or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding taxes. Each such Lender
further agrees to deliver to the Borrower, with a copy to the Agent, a Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms or manner
of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to
the Borrower, certifying in the case of a Form 1001 or 4224 that such
Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes (unless
in any such case an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable
or the exemption to which such forms relate unavailable and such Lender
notifies the Borrower and the Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income
taxes) and, in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.
(f) SURVIVAL. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.9 shall survive the payment in full of
the Obligations.
SECTION 3.10. AGREEMENT REGARDING INTEREST AND CHARGES. The parties
hereto hereby agree and stipulate that the only charge imposed upon the
Borrower for the use of money in connection with this Agreement is and
shall be the interest specifically described in Section 3.1.
Notwithstanding the foregoing, the parties hereto further agree and
stipulate that all agency fees, syndication fees, facility fees, letter of
credit fees, underwriting fees, default charges, late charges, funding or
"breakage" charges, increased cost charges, attorneys' fees and
reimbursement for costs and expenses paid by the Agent or any Lender to
third parties or for damages incurred by the Agent or any Lender, are
charges made to compensate the Agent or any such Lender for underwriting or
administrative services and costs or losses performed or incurred, and to
be performed or incurred, by the Agent and the Lenders in connection with
this Agreement and shall under no circumstances be deemed to be charges for
the use of money pursuant to Official Code of Georgia Annotated
Sections 7-4-2 and 7-4-18. All charges other than charges for the use of
money shall be fully earned and nonrefundable when due.
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND BORROWING
--------------------------------------------
SECTION 4.1. CLOSING. The closing shall take place at the offices of
Alston & Bird, on June 28, 1996, or on such other date as the parties
hereto shall mutually agree.
SECTION 4.2. CONDITIONS OF INITIAL LOANS AND ADVANCES. The
obligation of the Lenders to make the Loans on the Closing Date is subject
to the satisfaction of each of the following conditions:
(a) EXECUTED LOAN DOCUMENTS. Each Loan Document shall have been duly
authorized, executed and delivered to the Agent by the Borrower and each
other party thereto, as applicable, shall be in full force and effect and
no default shall exist thereunder.
(b) CLOSING CERTIFICATES; ETC.
(i) CERTIFICATE OF THE BORROWER. The Agent shall have received
a certificate dated as of the Closing Date from the chief executive
officer and chief financial officer of the Borrower, in form and
substance satisfactory to the Agent, to the effect that all
representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true, correct and complete
in all material respects; that the Borrower is not in violation of any
of the covenants contained in this Agreement and the other Loan
Documents; that, after giving effect to the transactions contemplated
by this Agreement, no Default or Event of Default has occurred and is
continuing; and that the Borrower has satisfied each of the closing
conditions.
(ii) CERTIFICATE OF THE SECRETARY OF THE BORROWER. The Agent
shall have received a certificate dated as of the Closing Date of the
secretary or assistant secretary of the Borrower certifying that
attached thereto is a true and complete copy of the articles of
incorporation of the Borrower and all amendments thereto, certified as
of a recent date by the appropriate governmental authority in its
jurisdiction of incorporation; that attached thereto is a true and
complete copy of the bylaws of the Borrower as in effect on the date
of such certification; that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors of the
Borrower authorizing the borrowings contemplated hereunder and the
execution, delivery and performance of this Agreement and the other
Loan Documents; and as to the incumbency and genuineness of the
signature of each officer of the Borrower executing this Agreement and
the other Loan Documents.
(iii) CERTIFICATES OF GOOD STANDING. The Agent shall have
received certificates as of a recent date of the good standing of the
Borrower under the laws of its jurisdiction of incorporation and each
state where the Borrower is transacting business.
(iv) OPINIONS OF COUNSEL. The Agent shall have received the
favorable opinion of the law firm of Hull, Towill, Norman and Barrett,
counsel to the Borrower, dated as of the Closing Date and addressed to
the Lenders, in form and substance satisfactory to the Agent.
(v) INSURANCE. The Agent shall have received certificates of
insurance evidencing the insurance required under Section 7.5 and
otherwise satisfactory to the Agent.
(c) CONSENTS; NO ADVERSE CHANGE.
(i) GOVERNMENTAL AND THIRD PARTY APPROVALS. All necessary
approvals, authorizations and consents, if any be required, of any
Person and of all governmental authorities and courts having
jurisdiction with respect to the transactions contemplated by this
Agreement shall have been obtained.
(ii) NO INJUNCTION, ETC. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any governmental authority to enjoin, restrain, or
prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement or the consummation of the
transactions contemplated hereby or which, in any Lender's discretion,
would make it inadvisable to consummate the transactions contemplated
by this Agreement.
(iii) NO MATERIAL ADVERSE CHANGE. In the reasonable judgment
of the Lenders, there shall not have occurred any material adverse
change in the business, business prospects, financial condition or
results of operations of the Borrower or any event, condition or state
of facts that would be expected materially and adversely to affect the
business, business prospects, financial condition or results of
operations of the Borrower.
(iv) NO EVENT OF DEFAULT. No Default or Event of Default shall
have occurred and be continuing.
(d) FINANCIAL MATTERS.
(i) FINANCIAL STATEMENTS. The Lenders shall have received
(A) audited financial statements for the fiscal year of the Borrower
ended December 31, 1995 certified by Arthur Andersen LLP, certified
public accountants to the Borrower, and in form and substance
satisfactory to the Lenders, and (B) such other financial information
including the interim financial statements described in Section 5.1(c)
as may be reasonably requested by the Lenders.
(ii) PAYMENT AT CLOSING. There shall have been paid by the
Borrower to the Agent and the Lenders any accrued and unpaid fees due
hereunder (including, without limitation, legal fees and expenses) ,
and to any other Person such amount as may be due, including all
taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of any of the Loan
Documents.
(e) MISCELLANEOUS.
(i) NOTICE OF BORROWING; DISBURSEMENT INSTRUCTIONS. The Agent
shall have received written instructions from the Borrower to the
Agent directing the payment of any proceeds of Loans made under this
Agreement that are to be paid on the Closing Date.
(ii) SENIOR NOTE AGREEMENTS. The Agent shall have received a
copy of each Senior Note Agreement certified to be a true and complete
copy by an Executive Officer of the Borrower.
(iii) PROCEEDINGS AND DOCUMENTS. All opinions, certificates
and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Lenders. The Lenders shall have received
copies of all other instruments and other evidence as the Lenders may
reasonably request, in form and substance satisfactory to the Lenders,
with respect to the transactions contemplated by this Agreement and
the taking of all actions in connection therewith.
SECTION 4.3. CONDITIONS TO ALL LOANS, ADVANCES AND LETTERS OF CREDIT.
The obligations of the Lenders to make any Loan to be made hereunder
(including the initial Loan), or issue any Letter of Credit, is subject to
the satisfaction of the following conditions precedent on the relevant
borrowing date:
(a) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Borrower contained in Article V
and in the other Loan Documents shall be true and correct on and as of such
borrowing or issuance date with the same effect as if made on and as of
such borrowing or issuance date.
(b) NO EXISTING DEFAULT. No Default or Event of Default shall have
occurred and be continuing hereunder on the borrowing or issuance date with
respect to such Loan or Letter of Credit or after giving effect to the
Loans or Letters of Credit to be made on such borrowing or issuance date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BORROWER
------------------------------------------
SECTION 5.1. GENERAL REPRESENTATIONS AND WARRANTIES. In order to
induce the Lenders to enter into this Agreement and to make the Loans, the
Borrower hereby represents and warrants to the Lenders that:
(a) ORGANIZATION; POWER; QUALIFICATION. The Borrower and each of its
Subsidiaries (i) has been duly incorporated or formed and continues to be
validly existing under the laws of its state of organization, (ii) is not
in liquidation, (iii) has all corporate or partnership powers and
governmental licenses, authorizations, consents and approvals required to
own or lease or operate its properties and to carry on its business as now
conducted and as presently proposed to be conducted and (iv) has been duly
qualified as a foreign corporation or partnership in each jurisdiction
where required by the conduct of its business or its ownership of
properties.
(b) AUTHORIZATION AND BINDING EFFECT. The execution, delivery and
performance of this Agreement and the Notes and the consummation of the
transactions contemplated hereby are within the corporate powers of the
Borrower and have been duly authorized by all necessary corporate action on
the part of the Borrower. On the Closing Date, this Agreement and the
Notes will be valid and legally binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms,
subject as to enforcement only to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity.
(c) FINANCIAL CONDITION. The audited financial statements for the
three fiscal years ended December 31, 1993, 1994 and 1995 of the Borrower
have been prepared in accordance with generally accepted accounting
principles and practices applied on a consistent basis and fairly present
the financial condition and the results of operations of the Borrower for
the periods ended on each such date. The unaudited consolidated financial
statements for the three month period ended March 31, 1996 of the Borrower
fairly present the financial condition and the results of operations of the
Borrower for the period ended on such date. Since December 31, 1995, there
has not been any material adverse change in the business, condition
(financial or otherwise), operations, liabilities, assets or prospects of
the Borrower except to the extent disclosed on SCHEDULE 5.1(C) hereto.
(d) TAXES. The Borrower and each of its Subsidiaries has filed all
tax returns or extensions and all information or similar reports required
by law to have been filed by it and has paid all taxes and other
governmental charges which it is required to have paid, except for taxes
and governmental charges the amount of which is being contested in good
faith and by appropriate proceedings and for which appropriate reserves
have been taken in accordance with generally accepted accounting
principles.
(e) NO CONFLICT. Neither the execution and delivery of the Notes,
the execution, delivery or performance of this Agreement by the Borrower,
nor the consummation by the Borrower of the transactions contemplated
hereby or thereby (i) requires any consent, approval, authorization or
other order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official or
conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, the articles of incorporation or by-laws, or other
organizational documents, of the Borrower, or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default
under, any agreement, indenture, lease or other instrument to which the
Borrower is a party or by which the Borrower or any of its properties may
be bound, or violates or will violate any statute, law, regulation or
filing or judgment, injunction, order or decree applicable to the Borrower
or any of its properties, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to the terms of any agreement or instrument to which the Borrower
is a party or by which the Borrower may be bound or to which any of its
property or assets is subject.
(f) INDEBTEDNESS. As of the Closing Date, neither the Borrower nor
any Subsidiary has any Indebtedness for Borrowed Money or Secured Debt
except as listed on SCHEDULE 5.1(F) hereto.
(g) NO VIOLATION; LITIGATION. Neither the Borrower nor any of its
Subsidiaries is in violation of its articles of incorporation or by-laws or
other organizational documents, or in violation in any material respect of
any law, ordinance, administrative or governmental rule or regulation
applicable to it or of any decree of any court or governmental agency or
body having jurisdiction over it. As of the Closing Date, except as
described on SCHEDULE 5.1(G) hereto, there are no legal or governmental
proceedings pending or, to the knowledge of the Borrower, threatened,
against the Borrower or any officer thereof, or to which the Borrower or
any of its properties or any of its Subsidiaries' properties is subject,
that if adversely determined, would have a material adverse effect on the
business, condition (financial or otherwise), operations, liabilities,
assets or prospects of the Borrower.
(h) MARGIN STOCK. None of the proceeds of the Notes will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System (herein called "margin stock") or for the purpose of
maintaining, reducing or retiring any indebtedness which was originally
incurred to purchase or carry any stock that is currently margin stock or
for any other purpose which might constitute this transaction a "purpose
credit" within the meaning of such Regulation G. Neither the Borrower nor
any agent acting on its behalf has taken or will take any action which
might cause this Agreement or the Notes to violate Regulation G, Regulation
T, Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System or to violate Section 7 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), in each case as in effect now or as
the same may hereafter be in effect.
(i) INVESTMENT COMPANY. Neither the Borrower nor any of its
Subsidiaries is, nor is directly or indirectly controlled by or acting on
behalf of any Person which is, required to register as an "investment
company" under the Investment Company Act of 1940, as amended.
(j) CONTINGENT LIABILITIES. As of the Closing Date, neither Borrower
nor any of its Subsidiaries has any contingent liabilities, including
without limitation any Contingent Liabilities as defined in Section 1.1 and
liabilities under contracts of the type referred to in Section 5.1(n), that
would be material to the Borrower that are not provided for or disclosed in
the financial statements referred to in Section 5.1(c) or disclosed on
SCHEDULE 5.1(J) hereto.
(k) ENVIRONMENTAL LAWS. The Borrower and each of its Subsidiaries is
and has been in compliance in all material respects with all applicable
Environmental Laws, and there is no Environmental Condition in respect of
the Borrower or any of its Subsidiaries, except in either case where the
absence of such compliance or the existence of an Environmental Condition,
in any case or in the aggregate, could not reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise)
, operations, liabilities, assets or prospects of the Borrower or any of
its Subsidiaries.
(1) ERISA.
(i) Each Plan complies in all material respects with the
currently applicable provisions of the Code and ERISA. No termination
of any Plan has occurred, is planned or is reasonably expected to
occur as a result of which the Borrower or any ERISA Affiliate has
incurred or may incur any liability to the PBGC or to any other
Person, which has not heretofore been satisfied. If any Plan were to
be terminated as of the last day of the most recent plan year, the
Borrower would not incur any liability under Title IV of ERISA, and
since the last day of each Plan's most recent plan year there has been
no material adverse change in the financial condition of such Plan.
No Plan has incurred any "accumulated funding deficiency" (as such
term is defined in section 412 of the Code or Section 302 of ERISA),
whether or not waived. No amendment with respect to which security is
required under Section 307 of ERISA or Section 401(a)(29) of the Code
has been made or is reasonably expected to be made to any Plan. The
Borrower and each ERISA Affiliate have made all contributions required
to be made by such Person to each Plan and each Multiemployer Plan as
and when such contributions have become due, and no event requiring
notice to the PBGC under Section 302(f)(4)(A) of ERISA or Section
412(n)(4)(A) of the Code has occurred and is continuing or is
reasonably expected to occur with respect to any Plan. No Plan
provides benefits which are contingent upon or directly affected by
the closing or shutdown of any facility or plant.
(ii) Neither the Borrower nor any ERISA Affiliate has incurred,
or is reasonably expected to incur, any Withdrawal Liability to any
Multiemployer Plan which has not heretofore been satisfied. Neither
the Borrower nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is insolvent, in reorganization or has
been terminated, within the meaning of Title IV of ERISA, and, to the
best of the Borrower's knowledge, no Multiemployer Plan is reasonably
expected to be insolvent, in reorganization or terminated within the
meaning of Title IV of ERISA.
(iii) Neither the Borrower nor any employee benefit plan
maintained by it provides post-retirement medical or life insurance
benefits that are not accrued as liabilities on the books of the
Borrower, except in respect of which the annual cost to the Borrower
of providing such benefits currently does not exceed, and is not
reasonably expected by the Borrower to exceed, $100,000.
(iv) No Person, Plan or, to the best of the Borrower's knowledge,
Multiemployer Plan, has engaged in a transaction that could, directly
or indirectly, result in any material liability of the Borrower under
ERISA (including without limitation Sections 409, 502(i) and 502(i)
thereof) or the Code (including without limitation Section 4975
thereof) or pursuant to any statute or agreement under which the
Borrower has agreed to indemnify or is required to indemnify any
Person against liability incurred under, or for a violation or failure
to satisfy the requirements of, any such statute or agreement, as the
case may be.
(v) The Borrower and its ERISA Affiliates have complied with the
health care continuation requirements of Part 6 of Title I of ERISA
and Section 4980B of the Code.
(m) SUBSIDIARIES. As of the Closing Date, the Borrower has no
Subsidiaries and does not own any interest in any partnership, joint
venture or other entity, except as listed on SCHEDULE 5.1(M) hereto.
(n) CONTRACTS. Except as described on SCHEDULE 5.1(N) hereto,
neither the Borrower nor any of its Subsidiaries has entered into, is a
party to, or has any obligations under, any material contract for the
purchase of materials, supplies or other property or services, if such
contract requires that payment be made by it regardless of whether or not
delivery is ever made of such materials, supplies or other property or
services.
(o) AFFILIATE TRANSACTIONS. As of the Closing Date, except as
described on SCHEDULE 5.1(O) hereto, all of the Borrower's transactions and
relationships with Affiliates, Related Persons and Related Persons of
Affiliates are on fair and reasonable terms comparable to those that would
be obtained in an arm's-length transaction between unrelated third parties.
(p) LABOR RELATIONS. From the date of corporate formation through
the Closing Date, there have been no strikes or other labor disputes or
grievances pending against the Borrower which have been, either in any case
or in the aggregate, materially adverse to the business, condition
(financial or otherwise), operations, liabilities, assets or prospects of
the Borrower. All payments due from the Borrower or any Subsidiary
pursuant to the provisions of any collective bargaining agreement have been
paid or accrued as a liability on the books of the Borrower and its
Subsidiaries, to the extent required by generally accepted accounting
principles, consistently applied.
(q) NO DEFAULT. No Default or Event of Default has occurred and is
continuing on the date hereof. Neither the Borrower nor any of its
Subsidiaries is in default in the payment of principal or interest on any
Indebtedness or is in default under any instrument or instruments or
agreements under and subject to which any Indebtedness has been incurred.
No event has occurred and is continuing under the provisions of any such
instrument or agreement that with the passage of time or the giving of
notice, or both, would constitute an event of default thereunder.
(r) STATUS AS REIT. The Borrower is and has been for each of the
Borrower's tax years from and including 1987, a "real estate investment
trust" within the meaning of Section 856 of the Code.
SECTION 5.2. REPRESENTATIONS AND WARRANTIES AS TO REAL PROPERTIES.
With respect to each real property owned or operated by it or its
Subsidiaries and in order to induce the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and
warrants, without limitation of any representations contained in Section
5.1 hereof, as follows:
(a) TITLE. The Borrower and each of its Subsidiaries has good and
marketable title in fee simple to such real property, and, as of the
Closing Date, such real property is free and clear of all Encumbrances,
subject only to (i) Encumbrances listed on Schedule 5.2(a) hereto, (ii) the
lien of current real property taxes and assessments not yet due and
payable, (iii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record, (iv) any exceptions and
exclusions specifically referred to in the title insurance policies
described in Section 5.2(b) below and (v) other matters to which like
properties are commonly subject and which do not materially interfere with
the operation, enjoyment or value of such real property.
(b) TITLE INSURANCE. Except as to undeveloped land acquired by the
Borrower prior to January 1, 1984, (i) on the date of purchase of each such
property, either (A) a title insurance policy was issued to the Borrower or
one of its Subsidiaries in an amount not less than the purchase price paid
by the Borrower or such Subsidiary, or (B) the Borrower or one of its
Subsidiaries had obtained a commitment from a title insurance company to
issue such title insurance policy following such purchase date, had
complied as of such purchase date with each other condition precedent to
the issuance of such title policy and had paid the premium in respect of
such policy, and in each case neither the Borrower nor any of its
Subsidiaries has taken any action that would cause such title insurance
policy not to be valid and in full force and effect or (ii) with respect to
such real property, there exists an attorney's opinion of title favorable
to the Borrower or one of its Subsidiaries, given by an attorney licensed
to practice law in the jurisdiction where such real property is located.
(c) TAXES, ETC. CURRENT. All material taxes, governmental
assessments, insurance premiums, and water, sewer and municipal charges
which previously became due and owing in respect of such real property have
been paid, or an escrow of funds in an amount sufficient to cover such
payments has been established.
(d) HAZARD INSURANCE. Such real property is covered by hazard
insurance (and, if applicable, federal flood insurance, except as described
on Schedule 5.2 (d)) in an amount at least equal to the greater of (i) 80%
of the replacement cost of the improvements on such real property, and
(ii) an amount sufficient to avoid the application of any coinsurance
clause contained in the related insurance policy; such insurance requires
prior notice to the Borrower of termination or cancellation, and no such
notice has been received.
(e) MECHANICS' LIENS. Such real property is free and clear of any
material mechanics' and materialmen's liens or liens in the nature thereof,
and no rights are outstanding that under law could give rise to any such
liens, except those which are insured against by the title insurance
policies referred to in Section 5.2(b) above, or for work conducted by the
Borrower or any of its Subsidiaries for which payment is not yet due (or is
being contested in good faith).
(f) IMPROVEMENTS. None of the improvements in respect of such real
property lies outside of the boundaries and building restriction lines of
such property in such a manner as to materially affect the value of such
improvements, no improvements on adjoining properties materially encroach
upon such real property, and no improvement located on or forming part of
such real property is in material violation of any applicable zoning laws
or ordinances.
(g) INSPECTIONS AND PHYSICAL CONDITION. As of the Closing Date, such
real property and any improvement or fixtures thereon are free of
structural defects or damage materially affecting their value, and all
building systems necessary for normal use of the property are in good
working order subject to ordinary wear and tear, except as described on
SCHEDULE 5.2(A).
(h) LICENSES AND PERMITS. The Borrower and its Subsidiaries are in
possession of all material certificates of occupancy or other similar
licenses, permits and other authorizations necessary and required by
applicable law for the use of such real property; and all such certificates
of occupancy or other similar licenses, permits and authorizations are
valid and in full force and effect.
(i) CONDEMNATION PROCEEDINGS. As of the Closing Date, there is no
material proceeding pending or threatened for the total or partial
condemnation of such real property, or for the relocation of roadways
providing access to such real property, except as described on SCHEDULE
5.2(I) hereto.
(j) PURCHASE OPTIONS. There are no outstanding options or rights of
first refusal materially affecting such real property.
(k) SEPARATE LOTS. Such real property is a separate tax parcel,
assessed for real estate tax purposes separately from property owned by any
other Person, with such exceptions as are not material.
(1) GROUND LEASES. Where the interest of the Borrower or any of its
Subsidiaries in such real property exists under a ground lease, such ground
lease is in full force and effect and no material default has occurred
under such ground lease, nor is there any existing condition which, but for
the passage of time or the giving of notice (other than rent, or other
payments due but not yet delinquent), would result in a material default
under the terms of such ground lease.
ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
---------------------------------
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full, unless consent has been obtained in the manner set forth
in Section 11.12 hereof, the Borrower will furnish to the Agent at the
Agent's Office and each Lender at the address set forth in Section 11.1
hereof, or such other office as may be designated by such Lender from time
to time:
SECTION 6.1. FINANCIAL STATEMENTS AND INFORMATION.
(a) SECURITIES FILINGS AND OTHER INFORMATION. Promptly upon any
other transmission thereof, copies of each periodic report (including Form
8-K, 10-K and 10-Q), proxy statement or prospectus relating to the
Borrower, any of its Subsidiaries or any of their respective securities as
shall be delivered to shareholders, any securities exchange or the
Commission, and the following reports, certificates and opinions to the
extent not included in the reports referred to above:
(i) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of
operations, cash flows and shareholders' equity for such fiscal year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and satisfactory in
scope to the Required Lenders and accompanied by an opinion thereon by
Arthur Andersen LLP or other nationally recognized independent public
accountants reasonably satisfactory to the Required Lenders, and which
shall state that such statements have been prepared in accordance with
generally accepted accounting principles (applied consistently with
the statements for the previous fiscal year), except for changes
disclosed by and concurred in by such accountants, all certified as
complete and correct and prepared in accordance with generally
accepted accounting principles, by the chief financial officer or
chief accounting officer of the Borrower;
(ii) as soon as available and in any event within sixty (60) days
after the end of each of the first three quarters of each fiscal year
of the Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries and the related consolidated statements of operations,
cash flows and shareholders' equity for such quarter, setting forth in
each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower's previous
fiscal year, all certified (subject to normal year-end audit
adjustments) as complete and correct and as having been prepared in
accordance with generally accepted accounting principles, consistently
applied, by the chief financial officer or chief accounting officer of
the Borrower;
(iii) simultaneously with the delivery of each set of
financial statements referred to in clauses (i) and (ii) above, a
certificate of an Executive officer of the Borrower (A) setting forth
in detail the amounts assigned to Borrower Total Assets, Operating
Cash Flow, Interest Expense, Secured Debt, Tangible Net Worth,
Borrower Earnings, Total Capitalization and Total Debt, as of the date
of such financial statements and showing calculations demonstrating
that the Borrower's obligations pursuant to Sections 7.10, 7.11, 8.1,
8.2, 8.3, 8.8 and 8.9 were met as of the date of such financial
statements (calculations relative to Section 8.9 shall include
calculation for each Project in the Development Phase as to total
budget, cost incurred to date, balance to complete, percent complete,
percent leased); (B) stating whether there exists on the date of such
certificate any Default or Event of Default and, if any Default or
Event of Default then exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with
respect thereto; (C) stating whether, since the date of the most
recent previous delivery of financial statements pursuant to clause
(i) or (ii) of this Section 6.1(a), there has been any material
adverse change in the business, financial position, results of
operations or prospects of the Borrower and its Subsidiaries, and, if
so, the nature of such material adverse change; and (D) certifying
compliance on the date of such certificate with the warranties and
representations in Article V hereof and specifying a change in
condition, if applicable;
(iv) simultaneously with the delivery of each set of financial
statements referred to in clause (i) above, a statement of the firm of
independent public accountants that reported on such statements
stating (A) that their audit examination has included a review of this
Agreement as it relates to financial or accounting matters,
(B) whether anything has come to their attention to cause them to
believe that there existed on the date of such statements any Default
or Event of Default, and (C) confirming the mathematical accuracy of
the calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (iii) above;
(v) as soon as available and in any event within thirty (30)
days after the end of each quarter of each fiscal year of the
Borrower, a statement demonstrating a comparison between the cost
budget of each project of the Borrower and its Subsidiaries in
Development Phase to the actual disbursements made, together with a
description of each such project setting forth the ownership, scope,
status of completion and occupancy, if applicable, of each such
project, certified as complete and correct and as having been prepared
in accordance with generally accepted accounting principles,
consistently applied, by the chief financial officer or chief
accounting officer of the Borrower;
(vi) promptly upon transmission thereof, copies of all press
releases and other statements made available generally by the Borrower
or any of its Subsidiaries to the public concerning material
developments in the results of operations, financial condition,
business or prospects of the Borrower or any of its Subsidiaries;
(vii) promptly upon receipt thereof, copies of each report
submitted to the Borrower or any of its Subsidiaries by independent
public accountants in connection with any annual, interim or special
audit made by them of the books of the Borrower or any of its
Subsidiaries including, without limitation, each report submitted to
the Borrower or any of its Subsidiaries concerning its accounting
practices and systems and any final comment letter submitted by such
accountants to management in connection with the annual audit of the
Borrower and its Subsidiaries;
(viii) promptly after receipt thereof, any written
communication from the Internal Revenue Service which challenges the
Borrower's status as a "real estate investment trust" within the
meaning of Section 856 of the Code; and
(ix) with reasonable promptness, such other data and information
as any Lender may reasonably request.
The Borrower shall file with the Commission, and transmit to holders,
such information, documents and other reports, and such summaries thereof,
as may be required pursuant to the Exchange Act at the times and in the
manner provided pursuant to such Act. In the event that the Borrower shall
cease to be required to file such information, documents or reports with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as
amended, the Borrower shall prepare and transmit to the holders
information, documents or reports substantially similar to those that would
have been required by Section 13 or 15(d) of the Exchange Act, as amended,
had the Borrower remained subject to such requirement. The Borrower shall
transmit to the holders copies of each communication from the Borrower to
shareholders generally at the same time as the Borrower makes such
communication.
(b) NOTICES. Upon the Borrower's obtaining knowledge of (i) a
Default or an Event of Default or (ii) the existence of any pending or
threatened actions, suits, investigations, litigations, or other judicial
or administrative proceedings which, if adversely determined, could
reasonably be expected to have an adverse effect on the condition
(financial or otherwise), operations, assets, businesses, properties or
prospects of the Borrower, deliver promptly (and in any event in the case
of clause (i) within three and in the case of clause (ii) within ten
Business Days after obtaining such knowledge) to each Lender a certificate
of an Executive Officer of the Borrower specifying the nature and period of
existence thereof and what action the Borrower proposes to take with
respect thereto.
(c) ERISA.
(i) As soon as possible and in any event (A) within 20 days
after the Borrower, any Subsidiary or any ERISA Affiliate knows or has
reason to know that any Termination Event described in clause (i) of
the definition of Termination Event with respect to any Plan has
occurred and (B) within 10 days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that any other
Termination Event with respect to any Plan has occurred, a statement
of the chief financial officer of the Borrower describing such
Termination Event and the action, if any, that the Borrower, such
Subsidiary or such ERISA Affiliate proposes to take with respect
thereto;
(ii) promptly and in any event within two Business Days after
application thereof or by the Borrower, any Subsidiary or any ERISA
Affiliate, copies of any application for a waiver of the minimum
funding standard under Section 412 of the Code or Section 302 of
ERISA;
(iii) promptly and in any event within two Business Days
after receipt thereof by the Borrower, any Subsidiary or any ERISA
Affiliate, copies of each notice received by the Borrower, any
Subsidiary or any ERISA Affiliate from the PBGC stating its intention
to administer any Plan or to have a trustee appointed to administer
any Plan or to impose any liability (other than for premiums under
Section 4007 of ERISA) in respect of any Plan;
(iv) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan;
(v) at the time notice is given or required to be given to the
PBGC under Section 302(f)(4)(A) of ERISA or Section 412 (n)(4)(A) of
the Code of the failure to make timely payments to a Plan, a copy of
any such notice filed and a statement of the chief financial officer
of the Borrower setting forth (A) sufficient information necessary to
determine the amount of the lien under Section 302 (f)(3) of ERISA or
Section 412 (n)(3) of the Code, (B) the reason for the failure to make
the required payments and (C) the action, if any, which the Borrower,
the Subsidiary or its ERISA Affiliate proposes to take with respect
thereto; and
(vi) promptly and in any event within five Business Days after
receipt thereof by the Borrower, any Subsidiary or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, a copy of each notice
received by the Borrower, any Subsidiary or any ERISA Affiliate
concerning (A) the imposition of Withdrawal Liability by a
Multiemployer Plan, (B) the determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization within the
meaning of Title IV of ERISA, (C) the termination of a Multiemployer
Plan within the meaning of Title IV of ERISA or (D) the amount of
liability incurred, or expected to be incurred, by the Borrower, any
Subsidiary or any ERISA Affiliate in connection with any event
described in clause (A), (B) or (C) above.
SECTION 6.2. ACCURACY OF INFORMATION. All written information,
reports, statements and other papers and data furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Agent or any Lender (other
than financial forecasts) whether pursuant to this Article VI or any other
provision of this Agreement shall be at the time the same is so furnished,
complete and correct in all material respects to the extent necessary to
give the Agent and the Lenders complete, true and accurate knowledge of the
subject matter based on the Borrower's knowledge thereof.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full, unless consent has been obtained in the manner
provided for in Section 11.12, the Borrower will duly and punctually
perform, and cause its Subsidiaries to duly and punctually perform, the
following covenants:
SECTION 7.1. BOOKS AND RECORDS. The Borrower and each Subsidiary
will keep proper accounting records in accordance with generally accepted
accounting principles. Each Lender shall have the right, subject to
reasonable notice and during regular business hours, to visit the
headquarters of the Borrower or any of its Subsidiaries or arrange a
telephone conference call or video conference in order to discuss the
affairs, finances and accounts of the Borrower or any of its Subsidiaries
with the appropriate officers of the Borrower or such Subsidiary and with
their present or former auditors. All expenses incurred by any Lender in
connection with the foregoing shall be solely for the account of such
Lender; PROVIDED, that if any Default shall have occurred and be
continuing, all such expenses shall be for the account of the Borrower in
accordance with Section 11.2 hereof.
Each Lender by its acceptance hereof agrees that any information
obtained by it pursuant to this Section 7.1 and designated in writing by
the Borrower as confidential will be treated as confidential in accordance
with such Lender's established policies respecting confidential
information; PROVIDED, that nothing herein contained shall limit or impair
the right or obligation of any Lender to disclose such information: (a) to
its auditors, attorneys, employees or agents, (b) when required by any law,
ordinance or governmental order, regulation, rule, policy, investigation or
any regulatory authority request, (c) as may be required in any report,
statement or testimony submitted to any municipal, state, provincial or
federal regulatory body having or claiming to have jurisdiction over such
Lender, (d) which is publicly available or which is received by any Lender
from a Person which is under no duty to keep the same confidential, (e) in
connection with any proceeding, case or matter pending before any court,
tribunal, arbitration board or any governmental agency, commission,
authority, board or similar entity or (f) to the extent necessary in
connection with any contemplated assignment by any Lender pursuant to
Section 11.11 (it being understood and agreed that any such prospective
assignee shall itself be deemed to have agreed to be bound by the terms and
provisions hereof upon any assignment to such transferee).
SECTION 7.2. PAYMENTS. The Borrower will duly and punctually pay the
principal of and interest on and any other amounts payable in respect of,
the Notes in accordance with their terms and this Agreement.
SECTION 7.3. CORPORATE AND PARTNERSHIP EXISTENCE, ETC. The Borrower
and each of its Subsidiaries will do, or cause to be done, all things
necessary to preserve and keep in full force and effect its corporate and
partnership existence. Without limitation of the foregoing, the Borrower
and its Subsidiaries will do, or cause to be done, all things necessary to
maintain all licenses, franchises and permits necessary to the conduct of
their business and the ownership of their properties, and shall not conduct
their business and activities other than in the ordinary course of business
and in accordance with past practice.
SECTION 7.4. PAYMENT OF TAXES. The Borrower and its Subsidiaries
will timely file all tax returns or extensions and all information or
similar reports required by law to be filed by them, and will pay all
applicable taxes and other governmental charges required to be paid, and
the Borrower will not (a) revoke its election to be a "real estate
investment trust" within the meaning of Section 856 of the Code, (b) take
or fail to take any action that will cause such election to be terminated
or to cease to be valid at any time, (c) incur liability f or any excise
tax under Section 4981 of the Code or (d) incur liability for any
prohibited transaction under Section 857(b)(6) of the Code.
SECTION 7.5. INSURANCE. The Borrower and its Subsidiaries will carry
and maintain in full force and effect at all times with financially sound
and reputable institutions insurance in such forms and amounts and against
such risks as may be reasonable and prudent in the circumstances f or a
company or group of companies of established reputation engaged in the same
or a similar business and owning and operating properties similar to those
of the Borrower and its Subsidiaries (including without limitation
property, casualty and liability insurance), and in any event as may be
required by applicable laws, statutes, regulations, rules or orders.
Without limitation of the foregoing, the Borrower shall promptly, and in
any event within 60 days of the Closing Date, obtain a policy of flood
insurance consistent with Section 5.2(d), for each property listed on
SCHEDULE 5.2(D).
SECTION 7.6. CONTINUANCE OF BUSINESS. The Borrower and its
Subsidiaries will limit themselves to, and continue to conduct, the
business in which the Borrower is currently engaged, consisting essentially
of owning and operating real estate in the United States and the Borrower
and its Subsidiaries shall not purchase or continue to hold any property
other than multi-family residential apartment complexes or Temporary
Investments ("Other Properties") to the extent that the book value of all
such Other Properties, taken singly or in the aggregate, exceeds 10% of the
aggregate book value of all the real property assets of the Borrower and
its Subsidiaries.
SECTION 7.7. CONTINUANCE OF MANAGEMENT. Peter S. Knox III, if not
incapacitated, will continue to serve as Chairman of the Board of Directors
of the Borrower, and continue to perform his current functions with respect
to the management and operations of the Borrower.
SECTION 7.8. ENVIRONMENTAL COVENANT. The Borrower and its
Subsidiaries and all properties (including leased facilities) operated by
them shall comply with all applicable Environmental Laws. Without
limitation of Section 8.5, the Borrower and its Subsidiaries shall use
their best efforts to avoid the occurrence of any Environmental Condition
either on the properties (including leased facilities) operated by them or
otherwise related in any way to the Borrower and its Subsidiaries or their
respective activities, except where the existence of an Environmental
condition, in any case or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, condition
(financial or otherwise) , operations, liabilities, assets or prospects of
the Borrower or any of its Subsidiaries. In the event any such
Environmental Condition occurs, the Borrower shall (a) take prompt action
to respond to and rectify such Environmental Condition and (b) deliver
promptly (and in any event within ten Business days after obtaining
knowledge of such Environmental Condition) to each Lender a certificate of
an Executive officer of the Borrower specifying the nature of such
Environmental Condition and what action the Borrower proposes to take with
respect thereto. The Borrower and its Subsidiaries shall treat, dispose
of, or arrange for treatment or disposal of Hazardous Materials only at
third-party treatment and disposal facilities which to the best of the
Borrower's knowledge, after reasonably diligent inquiry, maintain valid
permits and are operating in compliance with all applicable Environmental
Laws and permits. The Borrower and its Subsidiaries shall defend,
indemnify and hold harmless the Agent, the Lenders, and their respective
parents, subsidiaries, affiliates, employees, agents, officers and
directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any
way relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Borrower or its
Subsidiaries, or any orders, requirements or demands of any governmental
authority related thereto, including, without limitation, attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. (This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.)
SECTION 7.9. MAINTENANCE, ETC. The Borrower will, in all material
respects, maintain, preserve and keep, and will cause each Subsidiary to
maintain, preserve and keep, its properties which are used or useful in the
conduct of its business (whether owned in fee or a leasehold interest) in
good repair and working order and from time to time will make all necessary
repairs, replacements, renewals and additions so that at all times the
economic efficiency thereof shall be maintained. The Borrower and its
Subsidiaries shall obtain and maintain in full force and effect at all
times all permits, licenses, and government approvals necessary to the
lawful conduct of its business and the operation of its properties.
SECTION 7.10. INTEREST EXPENSE. The Borrower will maintain, as
measured at the end of each fiscal quarter for the immediately preceding
four fiscal quarters, a ratio of Operating Cash Flow to Interest Expense of
at least 2.5 to 1.0.
SECTION 7.11. TANGIBLE NET WORTH. The Borrower will maintain at all
times a Tangible Net Worth of at least $400,000,000.
SECTION 7.12. FURTHER ASSURANCES. The Borrower shall promptly
execute and deliver all further instruments and documents, and take all
further action that may be necessary or that the Agent may reasonably
request in order more fully to give effect to the provisions of this
Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full, unless consent has been obtained in the manner set
forth in Section 11.12 hereof, the Borrower will duly and punctually
perform, and cause its Subsidiaries to duly and punctually perform, the
following covenants:
SECTION 8.1. INDEBTEDNESS. The Borrower will not permit to exist at
any time any Indebtedness on behalf of itself or its Subsidiaries other
than:
(a) the Notes and the Senior Notes;
(b) Secured Debt and Subsidiary Debt, whether now existing or
hereafter incurred, PROVIDED, that in accordance with Section 8.2 the
aggregate of all Secured Debt and Subsidiary Debt may at no time exceed 10%
of Total Capitalization;
(c) Indebtedness subordinate in all respects to the Notes; and
(d) Indebtedness ranking pari passu to the Notes, provided that the
holder of any such Indebtedness which is in the form of a revolving credit
has first entered into an intercreditor agreement with Agent, the terms of
which intercreditor agreement are satisfactory to Agent;
PROVIDED, that the Borrower shall at no time permit its ratio of Total Debt
(including Secured Debt and Subsidiary Debt) to Total Capitalization to
exceed .4 to 1.0.
SECTION 8.2. ENCUMBRANCES. The Borrower will not permit to exist at
any time any Encumbrance on any property or asset of any kind, now owned or
hereafter acquired by the Borrower or any of its Subsidiaries other than:
(a) Encumbrances existing on the Closing Date and described on
SCHEDULE 8.2;
(b) Encumbrances created after the Closing Date, on property or
assets acquired by the Borrower or any of its Subsidiaries to secure a
portion of the purchase price thereof; PROVIDED, that such Encumbrance does
not exceed 75% of the lesser of the (i) cost or (ii) fair market value of
such property or asset;
(c) Encumbrances created after the Closing Date other than to secure
the purchase price of property or assets acquired by the Borrower or any of
its Subsidiaries;
(d) workmen's and other statutory liens in respect of obligations
arising after the Closing Date not due or being contested;
(e) liens for taxes not yet delinquent or being contested in good
faith; and
(f) judgment liens arising in connection with legal proceedings so
long as such proceedings are being contested and execution is stayed;
PROVIDED, that the aggregate of all Secured Debt and Subsidiary Debt may at
no time exceed 10% of Total Capitalization; and PROVIDED, FURTHER, that
such Secured Debt and Subsidiary Debt shall be included in, and not
permitted independently of, the limit on Total Debt contained in Section
8.1. For all purposes of this Agreement, a Capital Lease shall be deemed to
give rise to an Encumbrance on property owned by the Borrower or any of its
Subsidiaries and to create Secured Debt in the amount of the Capital Lease
Obligation.
SECTION 8.3. SALE OF ASSETS. The Borrower will not, nor will it
permit any of its Subsidiaries to, sell, lease or otherwise dispose (a) in
any one fiscal year, of any of its property or assets other than property
or assets which neither constituted in the aggregate more than 15% of
Borrower Total Assets nor contributed more than 15% of operating Cash Flow
in any one of the three preceding fiscal years or (b) in any three fiscal
year period, of any of its property or assets other than property or assets
which neither constituted in the aggregate more than 30% of Borrower Total
Assets as measured in each of such three fiscal years nor in the aggregate
contributed more than 30% of Operating Cash Flow measured in each of such
three fiscal years; PROVIDED, that the foregoing limitation will not apply
to Temporary Investments.
SECTION 8.4. MERGER. The Borrower will not merge or consolidate with
any Person unless thereafter:
(a) the Borrower would be the surviving entity;
(b) the Borrower would not be in breach of any covenant hereunder and
no Default would exist;
(c) without limitation of clause (b), no Change in Control or
violation of Section 7.7 would result from the merger; and
(d) the assets acquired by the Borrower as a result of such
transaction, or any series of related transactions, would be less than 25%
of Borrower Total Assets as measured immediately prior to such
transactions).
SECTION 8.5. PROPERTY ACQUISITION POLICY. The Borrower and its
Subsidiaries will not acquire any Property Investment unless the
representations contained in Section 5.2 hereof, if given as of the date of
such acquisition, would be true and correct with respect to all real
properties of the Borrower and its Subsidiaries. In addition, neither the
Borrower nor any subsidiary will purchase any new Property Investment
unless for each such Property Investment it shall first:
(a) conduct and document in writing the results of (i) a building
inspection (including without limitation tests for radon and asbestos),
(ii) an engineering analysis, (iii) a property investigation and (iv) all
other investigations and examinations as are customarily made by other
purchasers of properties similar to the property which is the subject of
the Property Investment; and
(b) conduct and document in writing the results of a Phase I
environmental review (a "Phase I") of such property and the surrounding
area and perform and document in writing all further investigation
necessary or appropriate in light of the findings of such Phase I and
determine that no Environmental Condition exists in such area that has the
potential to result in any material adverse effect on the condition
(financial or otherwise), operations, assets, businesses, properties or
prospects of the Borrower; PROVIDED, that if a Phase I cannot feasibly be
conducted due to time constraints dictated by the terms of the proposed
Property Investment, the Borrower shall perform computer database searches
to confirm the absence of any Environmental Condition, and shall perform as
much of the investigation and analysis which would be part of a Phase I as
is possible prior to the closing of the Property Investment transaction,
and will obtain a full Phase I within 60 days after the purchase of the
Property Investment has been effected. Each Phase I will be available for
inspection by the Agent or any Lender. At no time shall the aggregate book
value of all properties with respect to which there existed at the time of
purchase an Environmental Condition as described above exceed 5% of the
aggregate book value of all the real properties owned by the Borrower and
its Subsidiaries.
SECTION 8.6. CERTAIN INVESTMENTS PROHIBITED. The Borrower and its
Subsidiaries shall not purchase any Asset Backed Security unless (a) such
security is fully guaranteed by the United States or an agency or
instrumentality thereof (including mortgage backed securities issued by the
Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation or similar government sponsored entities) and (b) the security
is not classified as a "high-risk mortgage security" under the January 28,
1992 statement of policy of the Federal Financial Institutions Examination
council, or any subsequent amendment thereto or regulatory pronouncement
substituting therefor.
SECTION 8.7. TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS.
(a) The Borrower and its Subsidiaries will not (i) enter into or be a
party to any transaction with any Affiliate or Related Person of the
Borrower, or Related Person of any Affiliate of the Borrower (including
without limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any such parties) , except
in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's business and upon fair and reasonable terms no less
favorable to the Borrower than would be obtained in a comparable arm's-length
transaction between unrelated third parties or (ii) without
limitation of clause (i), increase the salary, fee, bonus or other
compensation (cash or otherwise) or amount payable to any director,
officer, employee, consultant, agent or contractor, except for increases
given in the ordinary course of business and, in respect of amounts and
timing, in accordance with past practice.
(b) Without limitation of subsection (a) above, the Borrower and its
Subsidiaries shall not make any payment under a contract or arrangement
with any Affiliate, Related Person, or Related Person of an Affiliate,
other than compensation for services as an officer, director or employee of
the Borrower to the extent permitted by subsection (a) above (such
payments, "Insider Payments") , except to the extent that the aggregate
amount of all Insider Payments otherwise prohibited by this subsection
(b) in the fiscal year in which such payment is made is less than $100,000;
PROVIDED, that Insider Payments shall not be deemed to include payments,
made in compensation for legal services, which are consistent with
subsection (a) above.
In determining whether the Borrower has complied with the covenants
contained in Sections 7.10, 7.11, 8.1, 8.2, 8.3 and 8.4, amounts receivable
by the Borrower and its Subsidiaries from their Related Persons, Affiliates
and Related Persons of such Affiliates shall be disregarded.
SECTION 8.8. RESTRICTED PAYMENTS. The Borrower and its Subsidiaries
will not make any Restricted Payment other than (a) payments required to
maintain the Borrower's status as a "real estate investment trust" within
the meaning of the Code for the 1994 tax year and (b) additional Restricted
Payments; PROVIDED, that the aggregate amount of all Restricted Payments
made after the September 30, 1993 does not exceed the amount of Borrower
Earnings; and PROVIDED, FURTHER, that in no event shall a Restricted
Payment be permitted to be made (i) when an Event of Default has occurred
and is continuing or (ii) if after the making of such payment, the Borrower
would be in breach of any of the covenants contained in Articles VI, VII or
VIII hereof.
SECTION 8.9. DEVELOPMENT ACTIVITY. The Borrower and its Subsidiaries
will not engage in any Development Activity other than Development Activity
in which the Borrower and its Subsidiaries do not have a total aggregate
investment at any time exceeding an amount equal to ten percent (10%) of
the aggregate book value of the real property owned by the Borrower and its
Subsidiaries not currently in Development Phase.
SECTION 8.10. AMENDMENTS TO SENIOR NOTE AGREEMENT. The Borrower will
not amend or otherwise modify the Senior Note Agreements or the Senior
Notes to effect any of the following: (a) increase the rate of interest,
(b) alter the time and manner of payments, (c) alter the maturity date,
(d) make the covenants more restrictive, (e) make the events of default
more restrictive to the Borrower, (f) restrict the Borrower's ability to
perform its obligations hereunder or (g) make any other changes which would
increase the obligations of the Borrower thereunder or confer additional
rights on the holders of the Senior Notes.
ARTICLE IX
DEFAULT AND REMEDIES
--------------------
SECTION 9.1. EVENTS OF DEFAULT. Each of the following shall
constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment or order of any court or any order, rule or
regulation of any governmental authority or otherwise:
(a) default shall occur in the payment of interest on any Note and
such default shall continue for a period of five days or default shall
occur in the making of any payment of the principal of any Note; or
(b) default shall occur in the observance or performance of any
covenant set forth in Sections 7.4, 7.10, 7.11, 8.1, 8.2, 8.4, 8.8 or 8.9;
or
(c) default shall occur in the observance or performance of any other
obligation, covenant, undertaking, condition or provision in respect of the
Notes or contained in this Agreement which is not remedied within thirty
(30) days after the earlier of: (i) the date on which the Borrower shall
have obtained knowledge of the occurrence of any Default and (ii) receipt
by the Borrower of written notice from the Agent or any Lender requiring
the same to be remedied; or
(d) the Borrower (i) defaults on any payment of principal or of
interest on any Indebtedness for Borrowed Money in excess of $500,000
individually or in the aggregate or (ii) defaults in the performance or
observance of any provision contained in any agreement respecting any other
Indebtedness in excess of $1,000,000 individually or in the aggregate; or
(e) there shall be entered in any court of competent jurisdiction,
any final judgment ordering the Borrower to pay money in excess of $250,000
or the equivalent thereof in another currency, and such judgment shall
remain undismissed, undischarged, or unstayed pending appeal and in effect
for a period of thirty (30) days from the entry thereof; or
(f) any representation in Article V hereof shall prove to have been
false or incorrect as of the date of the making thereof, or any other
representation or warranty made by the Borrower herein or in connection
with the consummation of this Agreement shall prove to have been false or
incorrect in any material respect as of the date of the making thereof; or
(g) the Borrower shall become insolvent or unable to pay its debts as
they fall due, or shall stop, suspend or threaten to stop or suspend
payment of all or a material part of its debts or shall propose or make a
general assignment or an arrangement or composition with or for the benefit
of its creditors, or a moratorium shall be agreed or declared in respect of
or affecting all or a material part of the Indebtedness of the Borrower; or
(h) there shall be entered an order by any competent court, or a
resolution passed, for the winding up or dissolution of the Borrower, save
for the purposes of reconstruction, amalgamation or reorganization on terms
approved by the Required Lenders; or
(i) the Borrower shall initiate or consent to judicial proceedings
relating to itself under any applicable liquidation, bankruptcy,
insolvency, composition, reorganization or other similar laws (including a
proceeding to appoint a receiver, trustee, custodian or other similar
official for it or for all or any material part of its assets) , or there
shall be commenced against the Borrower any such proceeding that results in
the entry of an order for relief or remains undismissed, unbonded or
unstayed pending appeal and in effect for a period of sixty (60) days from
the date of entry thereof; or the Borrower shall make a conveyance or
assignment for the benefit of, or shall enter into any composition or other
arrangement with, its creditors generally, save for the purposes of
reconstruction, amalgamation or reorganization on terms approved by the
Required Lenders; or
(j) the Borrower shall take any action authorizing, or in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth above in clauses (g) through (i); or
(k) a claim is asserted or threatened against the Borrower or any
Subsidiary which could have a material adverse effect on the Borrower,
including without limitation any such claim that reasonably could be
expected to result in liability or legally required expenditures in an
amount (i) that is equal to or exceeds 20% of the Borrower's Tangible Net
Worth or (ii) payment of which, if made as of the time such claim is
asserted or threatened, would cause the Borrower to violate any of the
provisions of Articles VI, VII or VIII hereof or otherwise result in any
Event of Default; or
(l) any Termination Event with respect to a Plan shall have occurred
and the sum (determined as of the date of occurrence of such Termination
Event) of the Insufficiency of such Plan and the Insufficiency of any and
all other Plans with respect to which a Termination Event shall have
occurred and be continuing (or in the case of a Multiple Employer Plan with
respect to which a Termination Event described in clause (ii) of the
definition of Termination Event shall have occurred and be continuing, the
liability of the Borrower, any Subsidiary and the ERISA Affiliates related
thereto) is equal to or greater than $1,000,000; or
(m) the Borrower, any Subsidiary or any ERISA Affiliate shall fail to
pay when due any amount or amounts equal to or greater than $100,000 that
it is obligated to pay under Title IV of ERISA; or
(n) the Borrower, any Subsidiary or any ERISA Affiliate shall have
committed a failure described in Section 302(f)(1) of ERISA or Section
412(n)(1) of the Code and the amount determined under Section 302(f)(3) of
ERISA or Section 412(n)(3) of the Code in respect of such failure shall be
equal to or greater than $1,000,000; or
(o) the Borrower, any Subsidiary or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans in connection with Withdrawal Liabilities (determined as of the date
of such notification), exceeds $500,000 or requires annual payments which
exceed by more than $100,000 the annual payments required to be made by the
Borrower, such Subsidiary or such ERISA Affiliate to such Multiemployer
Plan immediately or prior to the incurrence of such Withdrawal Liability;
or
(p) the borrower, any Subsidiary or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is insolvent or in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a result of such
insolvency, reorganization or termination the aggregate annual
contributions of the Borrower, any Subsidiary and the ERISA Affiliates to
all Multiemployer Plans that are then insolvent, in reorganization or being
terminated have been or will be increased over the amounts contributed to
such Multiemployer Plans for the respective plan years that include the
date hereof by an amount exceeding $1,000,000;
(q) the aggregate amount of the Insufficiencies as of the last day of
any Plan year in respect of all Plans having any Insufficiency as of such
date shall exceed $1,000,000; or
(r) a Change in Control shall occur.
SECTION 9.2. REMEDIES. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to the
Borrower:
(a) ACCELERATION; TERMINATION OF TOTAL COMMITMENT. Declare the
principal of and interest on the Loans and the Notes at the time
outstanding, and all other amounts owed to the Lenders and to the Agent
under this Agreement or any of the other Loan Documents and all other
Obligations, including an amount equal to the Stated Amount of all Letters
of Credit outstanding, to be forthwith due and payable, whereupon the same
shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or the other Loan Documents to the contrary
notwithstanding, and terminate the Total Commitment and any right of the
Borrower to request borrowings thereunder; PROVIDED, that upon the
occurrence of an Event of Default specified in section 9.1(g), (h), (i) and
(j), the Total Commitment shall be automatically terminated and all
Obligations shall automatically become due and payable. Nothing herein
shall be construed to permit the Agent or any Lender to charge or collect
any unmatured or unearned interest.
(b) RIGHTS OF COLLECTION. Exercise on behalf of the Lenders all of
its other rights and remedies under this Agreement, the other Loan
Documents and applicable law, in order to satisfy all of the Borrower's
Obligations.
SECTION 9.3. RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The
enumeration of the rights and remedies of the Agent and the Lenders set
forth in this Agreement is not intended to be exhaustive and the exercise
by the Agent and the Lenders of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative,
and shall be in addition to any other right or remedy given hereunder or
under the Loan Documents or that may now or hereafter exist in law or in
equity or by suit or otherwise. No delay or failure to take action on the
part of the Agent and the Lenders in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude other or
further exercise thereof or the exercise of any other right, power or
privilege or shall be construed to be a waiver of any Event of Default. No
course of dealing between Borrower, the Agent, and the Lenders or their
respective agents or employees shall be effective to change, modify or
discharge any provision of this Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.
SECTION 9.4. COLLATERAL ACCOUNT.
(a) As collateral security for the prompt payment in full when due of
all Letter of Credit Liabilities, the Borrower hereby pledges and grants to
the Agent, for the benefit of the Agent and the Lenders as provided herein,
a security interest in all of its right, title and interest in and to the
Collateral Account and the balances from time to time in the Collateral
Account (including the investments and reinvestments therein provided for
below). The balances from time to time in the Collateral Account shall not
constitute payment of any Letter of Credit Liabilities until applied by the
Agent as provided herein. Anything in this Agreement to the contrary
notwithstanding, funds held in the Collateral Account shall be subject to
withdrawal only as provided in this Section.
(b) Amounts on deposit in the Collateral Account shall be invested
and reinvested by the Agent in such Cash Equivalents as the Agent shall
determine in its sole discretion. All such investments and reinvestments
shall be held in the name of and be under the sole dominion and control of
the Agent. The Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords other funds
deposited with the Agent, it being understood that the Agent shall not have
any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any funds held in the Collateral
Account.
(c) If an Event of Default shall have occurred and be continuing, the
Agent may (and, if instructed by the Required Lenders, shall) in its (or
their) discretion at any time and from time to time elect to liquidate any
such investments and reinvestments and credit the proceeds thereof to the
Collateral Account and apply or cause to be applied such proceeds and any
other balances in the Collateral Account to the payment of any of the
Letter of Credit Liabilities due and payable.
(d) If (i) no Default or Event of Default has occurred and is
continuing and (ii) all of the Letter of Credit Liabilities have been paid
in full, the Agent shall, from time to time, at the request of the
Borrower, deliver to the Borrower, against receipt but without any
recourse, warranty or representation whatsoever, such of the balances in
the Collateral Account as exceed the aggregate amount of Letter of Credit
Liabilities at such time. When all of the Obligations shall have been paid
in full and no Letters of Credit remain outstanding, the Agent shall
promptly deliver to the Borrower, against receipt but without any recourse,
warranty or representation whatsoever, the balances remaining in the
Collateral Account.
(e) The Borrower shall pay to the Agent from time to time such fees
as the Agent normally charges for similar services in connection with the
Agent's administration of the Collateral Account and investments and
reinvestments of funds therein.
ARTICLE X
THE AGENT
---------
SECTION 10.1. APPOINTMENT. Each of the Lenders hereby irrevocably
designates and appoints First Union National Bank of Georgia as the Agent
of such Lender under this Agreement and the other Loan Documents, and each
such Lender irrevocably authorizes First Union National Bank of Georgia as
the Agent for such Lender to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the Agent
by the terms of this Agreement and such other Loan Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement or such other
Loan Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or the other Loan Documents or otherwise exist against the
Agent. To the extent any provision of this Agreement permits action by the
Agent, the Agent shall, subject to the provisions of Section 11.12 hereof
and of this Article X, take such action if directed in writing to do so by
the Required Lenders.
SECTION 10.2. DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 10.3. EXCULPATORY PROVISIONS. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or the other
Loan Documents (except for its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders
for any recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement or the other
Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or the other Loan Documents or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or the other Loan Documents or for any failure of the
Borrower to perform its obligations hereunder or thereunder. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in,
or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
SECTION 10.4. RELIANCE BY AGENT. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to the Borrower) , independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note
as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 11.11 hereof. The Agent shall be
fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the Notes in accordance with a request of the Required Lenders (except for
such events which require the consent of each of the Lenders as set forth
in Section 11.12), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
SECTION 10.5. NOTICE OF DEFAULT. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall promptly give
notice thereof to the Lenders. The Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders; PROVIDED that unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 10.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the Agent
to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder or by the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Borrower which may
come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
SECTION 10.7. INDEMNIFICATION. The Lenders agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably
according to the respective amounts of their Commitment Percentages, from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind whatsoever which may at any time (including, without limitation,
at any time following the payment of the Notes) be imposed on, incurred by
or asserted against the Agent in any way relating to or arising out of this
Agreement or the other Loan Documents, or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection
with any of the foregoing; PROVIDED that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's bad faith, gross negligence or willful
misconduct. The agreements in this Section 10.7 shall survive the payment
of the Notes and all other amounts payable hereunder.
SECTION 10.8. AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrower as though the Agent were not the
Agent hereunder. With respect to Loans made or renewed by it and any Note
issued to it, the Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
SECTION 10.9. SUCCESSOR AGENT. Upon at least sixty (60) days' prior
written notice to the Borrower and the Lenders, (a) the Agent may resign as
Agent hereunder and (b) the Agent may be removed as Agent hereunder, with
or without cause, by the Required Lenders. If the Agent shall resign or be
so removed as Agent under this Agreement, then the Required Lenders, with
the prior written approval of the Borrower (which approval shall not be
unreasonably withheld), shall appoint from among the Lenders a successor
agent for the Lenders whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated, without any other
or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of
Section 10.7 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1. NOTICES.
(a) METHOD OF COMMUNICATION. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or
by telephone subsequently confirmed in writing. Any notice shall be
effective if delivered by hand delivery or sent via telecopy, recognized
overnight courier service or certified mail, return receipt requested, and
shall be presumed to be received by a party hereto (i) on the date of
delivery if delivered by hand or sent by telecopy, (ii) an the next
Business Day if sent by recognized overnight courier service and (iii) on
the third Business Day following the date sent by certified mail, return
receipt requested. A telephonic notice to the Agent as understood by the
Agent will be deemed to be the controlling and proper notice in the event
of a discrepancy with or failure to receive a confirming written notice.
(b) ADDRESSES FOR NOTICES. Notices to any party shall be sent to it
at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrower: Merry Land & Investment Company, Inc.
624 Ellis Street
Augusta, Georgia 30901
Attention: Peter S. Knox III
Telecopy No.: (706) 722-4681
If to the Agent: First Union National Bank of Georgia
999 Peachtree Street, N.E., 9th Floor
Atlanta, Georgia 30309
Attention: Real Estate Portfolio Management
Telecopy No. (404) 827-7309
and (if applicable)
First Union National Bank of
North Carolina
One First Union Center
301 South College Street, TW-10
Charlotte, North Carolina 28288
Attention: Syndication Agency
Services
Telecopy No.: (704) 383-0288
If to the Lenders: The address set forth on the signature pages
hereto
(c) AGENT'S OFFICE. The Agent hereby designates its office located
at the address set forth above, or any subsequent office which shall have
been specified for such purpose by written notice to the Borrower, as the
Agent's Office referred to herein, to which payments due are to be made and
at which Loans will be disbursed.
SECTION 11.2. EXPENSES. The Borrower will pay all out-of-pocket
expenses of the Agent in connection with: (a) the preparation, execution
and delivery of this Agreement and each of the other Loan Documents,
whenever the same shall be executed and delivered, including appraiser's
fees, search fees, recording fees, taxes and the reasonable fees and
disbursements of counsel for the Agent; (b) the preparation, execution and
delivery of any waiver, amendment or consent by the Agent or the Lenders
relating to this Agreement or any of the Loan Documents including fees and
disbursements of counsel for the Agent, search fees, recording fees, taxes
imposed in connection therewith and title insurance premiums, but excluding
future fees or costs incurred by Agent or Lenders solely in order to
syndicate the Loan; and (c) upon an Event of Default, consulting with one
or more Persons, including appraisers, accountants and attorneys,
concerning or related to the nature, scope or value of any right or remedy
of the Agent or any of the Lenders hereunder or under any of the other Loan
Documents, including any review of factual matters in connection therewith,
which expenses shall include the fees and disbursements of such Persons.
In addition, the Borrower will pay all out-of-pocket expenses of the Agent
and each Lender in connection with prosecuting or defending any claim in
any way arising out of, related to, connected with, or enforcing any
provision of, this Agreement or any of the other Loan Documents, which
expenses shall include the fees and disbursements of counsel and of experts
and other consultants retained by the Agent or any of the Lenders.
SECTION 11.3. STAMP AND OTHER TAXES. The Borrower will pay any and
all stamp, registration, recordation and similar taxes, fees or charges and
shall indemnify the Lenders against any and all liabilities with respect to
or resulting from any delay in the payment or omission to pay any such
taxes, fees or charges which may be payable or determined to be payable in
connection with the execution, delivery, performance or enforcement of this
Agreement and any of the other Loan Documents or the perfection of any
rights thereunder.
SECTION 11.4. SET-OFF. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such
rights, upon and after the occurrence of any Event of Default and during
the continuance thereof, the Lenders, any Affiliates of the Lenders and any
participant of a Lender in accordance with Section 11.11 are hereby
authorized by the Borrower at any time or from time to time, without notice
to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured, excluding government securities required by applicable law to be
held as security for worker's compensation and similar claims) and any
other indebtedness at any time held or owing by the Lenders or any
Affiliate of the Lenders, or any participant to or for the credit or the
account of the Borrower against and on account of the Obligations (applied
to current Obligations first) irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other
Loan Documents, or (b) the Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 9.2 and although
such Obligations shall be contingent or unmatured.
SECTION 11.5. GOVERNING LAW. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be
governed by, construed and enforced in accordance with the laws of the
State of Georgia, without reference to the conflicts or choice of law
principles thereof.
SECTION 11.6. CONSENT TO JURISDICTION. The Borrower hereby
irrevocably consents to the personal jurisdiction of the state and federal
courts located in Richmond County, Georgia, in any action, claim or other
proceeding arising out of any dispute in connection with this Agreement,
the Notes and the other Loan Documents, any rights or obligations hereunder
or thereunder, or the performance of such rights and obligations. The
Borrower hereby irrevocably consents to the service of a summons and
complaint and other process in any action, claim or proceeding brought by
the Agent or any Lender in connection with this Agreement, the Notes or the
other Loan Documents, any rights or obligations hereunder or thereunder, or
the performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 11.1. Nothing in this Section
11.6 shall affect the right of the Agent or any Lender to serve legal
process in any other manner permitted by applicable law or affect the right
of the Agent or any Lender to bring any action or proceeding against the
Borrower or its properties in the courts of any other jurisdictions.
SECTION 11.7. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWER, THE AGENT AND THE LENDERS, BY EXECUTION
HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES, ANY OTHER LOAN DOCUMENT OR
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR
THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO OR THERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT TO THE AGENT AND THE LENDERS TO
ENTER INTO THIS AGREEMENT.
SECTION 11.8. REVERSAL OF PAYMENTS. To the extent the Borrower makes
a payment or payments to the Agent for the ratable benefit of the Lenders
or the Agent receives any payment or proceeds of any collateral for the
Borrower's benefit, which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received,
the Obligations or part thereof intended to be satisfied shall be revived
and continued in full force and effect as if such payment or proceeds had
not been received by the Agent.
SECTION 11.9. INJUNCTIVE RELIEF. The Borrower recognizes that, in
the event the Borrower fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy of law may
prove to be inadequate relief to the Lenders. Therefore, the Borrower
agrees that the Lenders, at the Lenders' option, shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
SECTION 11.10. ACCOUNTING MATTERS. All financial and accounting
calculations, measurements and computations made for any purpose relating
to this Agreement, including, without limitation, all computations utilized
by the Borrower to determine whether it is in compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby,
or unless there is an express written direction by the Agent to the
contrary agreed to by the Borrower, be performed in accordance with
generally accepted accounting principles. In the event that changes in
generally accepted accounting principles shall be mandated by the Financial
Accounting Standards Board, or any similar accounting body of comparable
standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting
terms or the interpretation or computation thereof, such changes shall be
followed in defining such accounting terms only from and after the date the
Borrower and the Lenders shall have amended this Agreement to the extent
necessary to reflect any such changes in the financial covenants and other
terms and conditions of this Agreement.
SECTION 11.11. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lenders, the Agent, all future
holders of the Notes, and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) ASSIGNMENT BY LENDERS. Each Lender may assign to one or more
Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Loans at the time owing to it and the Notes held by it);
PROVIDED, that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and
obligations under this Agreement and in a minimum amount of at least
$10,000,000;
(ii) each such assignment shall be made to an Eligible Assignee
approved in writing by the Borrower, which approval shall not be
unreasonably withheld;
(iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit E (an
"Assignment and Acceptance") , together with any Note or Notes subject
to such assignment and such assignee's payment of Agent's syndication
expenses not to exceed $2,500 for each assignment; and
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations
of a Lender hereby and (B) the Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement.
(c) RIGHTS AND DUTIES UPON ASSIGNMENT. By executing and delivering
an Assignment and Acceptance, the Lender assignor thereunder and the
assignee thereunder confirm to and agree with each other and the other
parties hereto as follows:
(i) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, such Lender assignor makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto;
(ii) such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower or the performance or observance by the Borrower of any
of its obligations under this Agreement or any other instrument or
document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements
referred to in sections 5.1(c) and 6.1 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon
the Agent, such Lender assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent
by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders and the Commitment Percentage of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register") . The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) ISSUANCE OF NEW NOTES. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee
together with any Note or Notes subject to such assignment and the written
consent to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed and is in the form of EXHIBIT E:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Agent, in exchange for the surrendered Note or
Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the commitments assumed by it pursuant to such Assignment
and Acceptance and a new Note or Notes to the order of the assigning Lender
in an amount equal to the commitments retained by it hereunder. Such new
Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes delivered to
the assignor Lender. Each surrendered Note or Notes shall be canceled and
returned to the Borrower.
(f) PARTICIPATIONS. Each Lender may, without the consent of the
Borrower, sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its commitments hereunder and the
Loans owing to it and the Notes held by it); PROVIDED, that:
(i) such Lender's obligations under this Agreement (including,
without limitation, its commitments hereunder) shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iii) such Lender shall remain the holder of the Notes held
by it for all purposes of this Agreement;
(iv) the Borrower, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement;
(v) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate
on any Loan, extend the term or increase the amount of the commitments
of such participant, reduce the amount of any fees to which such
participant is entitled or extend any scheduled payment date for
principal; and
(vi) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission to apply to qualify the Loans
or the Notes under the blue sky law of any state.
(g) DISCLOSURE OF INFORMATION; CONFIDENTIALITY. Any Lender may, in
connection with any assignment, proposed assignment, participation or
proposed participation pursuant to this Section 11.11, disclose to the
assignee, participant, proposed assignee or proposed participant, any
information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower; PROVIDED, that prior to any such disclosure, each
such assignee, proposed assignee, participant or proposed participant shall
agree with the Borrower or such Lender (which in the case of an agreement
with only such Lender, the Borrower shall be recognized as a third party
beneficiary thereof) to preserve the confidentiality of any confidential
information relating to the Borrower received from such Lender.
SECTION 11.12. AMENDMENTS, WAIVERS AND CONSENTS. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any
of the other Loan Documents may be amended or waived by the Lenders, and
any consent given by the Lenders if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders and, in the case of an
amendment, by the Borrower; PROVIDED, that no amendment, waiver or consent
shall (a) increase the amount or extend the time of the obligation of the
Lenders to make Loans, (b) extend the originally scheduled time or times of
payment of the principal of any Loan or the time or times of payment of
interest on any Loan, (c) increase the amount of the principal of any Loan
or decrease the rate of interest thereon, (d) permit any subordination of
the principal of or interest on any Loan, or (e) amend the provisions of
this Section 11.12 or the definition of "Required Lenders", without the
prior written consent of each Lender. In addition, no amendment, waiver or
consent to the provisions of Article X hereof shall be made without the
prior written consent of the Agent.
SECTION 11.13. PERFORMANCE OF BORROWER'S DUTIES. The Borrower's
obligations under this Agreement and each of the other Loan Documents shall
be performed by the Borrower at its sole cost and expense.
SECTION 11.14. INDEMNIFICATION. The Borrower agrees to reimburse the
Agent and the Lenders for all reasonable costs and expenses, including
counsel fees and disbursements, incurred, and to indemnify and hold the
Agent and the Lenders harmless from and against all losses suffered by the
Agent and the Lenders, in connection with (a) the exercise by the Agent and
the Lenders of any right (other than the rights described in Section 11.11
hereof) or remedy granted to them under this Agreement or any of the other
Loan Documents, (b) any claim, and the prosecution or defense thereof,
arising out of or in any way connected with this Agreement or any of the
other Loan Documents, and (c) the collection or enforcement of the
Obligations or any of them; PROVIDED, that the Borrower shall not be
obligated to reimburse the Agent or the Lenders for costs and expenses, or
indemnify the Agent or the Lenders for any loss, resulting from the bad
faith, gross negligence or willful misconduct of the Agent or the Lenders.
SECTION 11.15. ALL POWERS COUPLED WITH INTEREST. All powers of
attorney and other authorizations granted to the Lenders, the Agent and any
Persons designated by the Lenders pursuant to any provisions of this
Agreement or any of the other Loan Documents shall be deemed coupled with
an interest and shall be irrevocable so long as any of the obligations
remain unpaid or unsatisfied and the Total Commitment has not been
terminated.
SECTION 11.16. SURVIVAL OF INDEMNITIES. Notwithstanding any
termination of this Agreement, the indemnities to which the Agent and the
Lenders are entitled under the provisions of this Article XI and any other
provision of this Agreement and the other Loan Documents shall continue in
full force and effect and shall protect the Agent and the Lenders against
events arising after such termination as well as before.
SECTION 11.17. TITLES AND CAPTIONS. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 11.18. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to
the extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.19. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and
assigns, and all of which taken together shall constitute one and the same
agreement.
SECTION 11.20. TERM OF AGREEMENT. This Agreement shall remain in
effect from the Closing Date through and including the date upon which all
obligations shall have been indefeasibly and irrevocably paid and satisfied
in full. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination.
SECTION 11.21. ADJUSTMENTS. If any Lender (a "Benefited Lender")
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or if any Lender shall at any time receive any collateral
in respect to its Loans (whether voluntarily or involuntarily, by set-off,
or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, such Benefited Lender shall purchase
for cash from the other Lenders such portion of each such other Lender's
Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; PROVIDED, that if all or any
portion of such excess payment or benefits is thereafter recovered from
such Benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned to the extent of such recovery, but without
interest. The Borrower agrees that each Lender so purchasing a portion of
another Lender's Loan may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as
fully as if such Lender were the direct holder of such portion.
SECTION 11.22. FIRST UNION NATIONAL BANK OF GEORGIA AS LENDER. First
Union National Bank of Georgia, as a Lender, shall have the same rights and
powers under this Agreement and any other Loan Document as any other Lender
and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
First Union National Bank of Georgia in each case in its individual
capacity. First Union National Bank of Georgia and its Affiliates may each
accept deposits from, maintain deposits or credit balances for, invest in,
lend money to, act as trustee under indentures of, serve as financial
advisor to, and generally engage in any kind of business with the Borrower
or any Affiliate thereof as if it were any other bank and without any duty
to account therefor to the other Lenders. Further, the Agent and any
Affiliate may accept fees and other consideration from the Borrower for
services in connection with this Agreement and otherwise without having to
account for the same to the other Lenders.
SECTION 11.23. LENDER CREDIT DECISION, ETC. Each Lender expressly
acknowledges and agrees that neither the Agent nor any of its officers,
directors, employees, agents, counsel, attorneys-in-fact or other
Affiliates has made any representations or warranties as to the financial
condition, operations, creditworthiness, solvency or other information
concerning the business or affairs of the Borrower, any Subsidiary or other
Person to such Lender and that no act by the Agent hereinafter taken,
including any review of the affairs of the Borrower, shall be deemed to
constitute any such representation or warranty by the Agent to any Lender.
Each Lender acknowledges that it has, independently and without reliance
upon the Agent, any other Lender or counsel to the Agent, or any of their
respective officers, directors, employees and agents, and based on the
financial statements of the Borrower, the Subsidiaries or any other
Affiliate thereof, and inquiries of such Persons, its independent due
diligence of the business and affairs of the Borrower, the Subsidiaries and
other Persons, its review of the Loan Documents, the legal opinions
required to be delivered to it hereunder, the advice of its own counsel and
such other documents and information as it has deemed appropriate, made its
own credit and legal analysis and decision to enter into this Agreement and
the transaction contemplated hereby. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent, any other Lender
or counsel to the Agent or any of their respective officers, directors,
employees and agents, and based on such review, advice, documents and
information as it shall deem appropriate at the time, continue to make its
own decisions in taking or not taking action under the Loan Documents.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall have no
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower or any Affiliate
thereof which may come into possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or other Affiliates.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers, all as of the day and year
first written above.
BORROWER:
[CORPORATE SEAL] MERRY LAND & INVESTMENT COMPANY, INC.
ATTEST:
By: By:
Name: Name:
Title: Title: President
AGENT:
FIRST UNION NATIONAL BANK
OF GEORGIA
By:
Name:
Title:
LENDER:
FIRST UNION NATIONAL BANK
OF GEORGIA
By:
Name:
Title: President
Address:
999 Peachtree Street, N.E.
9th Floor
Atlanta, Georgia 30309
Attention: Real Estate Portfolio Management
<PAGE>
EXHIBIT A
---------
to
Credit Agreement
dated as of June 28, 1996
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
NOTE
- ----
$ June 28, 1996
FOR VALUE RECEIVED, the undersigned, MERRY LAND & INVESTMENT COMPANY,
INC., a Georgia corporation (the "Borrower") , promises to pay to the order
of FIRST UNION NATIONAL BANK OF GEORGIA, a national banking association
(the "Lender"), at the place and times provided in the Credit Agreement
referred to below, the principal sum of ___________________________________
Dollars ($__________) or, if less, the principal amount of all outstanding
Loans made by the Lender from time to time pursuant to that certain Credit
Agreement dated as of even date herewith (together with all amendments and
other modifications, if any, from time to time hereafter made thereto, the
"Credit Agreement") among the Borrower, the Lenders who are or may become a
party thereto (collectively, the "Lenders") and First Union National Bank
of Georgia, as Agent for the Lenders. Capitalized terms used herein and
not defined herein shall have the meanings ascribed to them in the Credit
Agreement.
The unpaid principal amount of this Note from time to time outstanding
is subject to repayment on the Termination Date as provided in the Credit
Agreement and shall bear interest as provided in Section 3.1 of the Credit
Agreement. All payments of principal of and interest on this Note shall be
payable in lawful currency of the United States of America in immediately
available funds to the account designated in the Credit Agreement.
This Note is a Note referred to in, is entitled to the benefits of,
and evidences obligations incurred under, the Credit Agreement, to which
reference is made for a statement of the terms and conditions on which the
Borrower is permitted and required to make repayments of principal of the
Obligations evidenced by this Note and on which such Obligations may be
declared to be immediately due and payable.
THIS NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF GEORGIA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW
PRINCIPLES THEREOF.
The Borrower hereby waives all requirements as to diligence,
presentment, demand of payment, protest and (except as required by the
Credit Agreement) notice of any kind with respect to this Note.
IN WITNESS WHEREOF, the undersigned Borrower has executed this Note
under seal as of the day and year first above written.
MERRY LAND & INVESTMENT COMPANY, INC., a
Georgia corporation
(CORPORATE SEAL]
By:
Name:
Title:
<PAGE>
EXHIBIT B
---------
to
Credit Agreement
dated as of June 28, 1996
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
NOTICE OF BORROWING
-------------------
First Union National Bank
of Georgia, as Agent
[Address]
Attention:
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you, in your
capacity as Agent, under Section 2.2 of the Credit Agreement dated as of
June 28, 1996 (the "Credit Agreement") by and among Merry Land & Investment
Company, Inc. (the "Borrower"), the Lenders which are, or may from time to
time become, party thereto (collectively, the "Lenders") and First Union
National Bank of Georgia, as Agent for the Lenders.
1. The Borrower hereby requests that the Lenders make a Loan in the
principal amount of $____________. (For Loans which are LIBOR Rate Loans
complete with an amount equal to $1,000,000 or a whole multiple of $50,000
in excess thereof.)
2. The Borrower hereby requests that the Loan(s) be made on the
following Business Day: __________________. (Complete with a date at least
one (1) Business Day after the date of this Notice for a Prime Rate Loan
and at least three (3) Business Days after the date of this Notice for a
LIBOR Rate Loan.)
3. The Borrower hereby requests that the Loan(s) bear interest at
the following interest rate, PLUS the Applicable Margin, as set forth
below: (Check one.)
Principal Component Interest Interest
of Loan(s) Rate Period
-------------------- -------- -------
_____________________ [Prime Rate or [One, two or
LIBOR Rate] three months]
_____________________
4. The principal amount of all Loans outstanding as of the date
hereof (including the requested Loan) does not exceed the maximum amount
permitted to be outstanding pursuant to the terms of the Credit Agreement.
5. The obligations of the Borrower set forth in the Credit Agreement
and the other Loan Documents are valid, binding and enforceable obligations
of the Borrower as of the date hereof, both before and after giving effect
to the Loan requested herein.
6. All of the conditions applicable to the Loan requested herein as
set forth in the Credit Agreement have been satisfied as of the date hereof
and will remain satisfied to the date of such Loan.
7. No Default or Event of Default exists, and none will exist upon
the making of the Loan requested herein.
8. The representations and warranties of the Borrower under the
Credit Agreement and the other Loan Documents are true and correct in all
material respects as of the date hereof, both before and after giving
effect to the Loan requested herein.
9. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Borrowing this ______ day of _______________, 19___.
MERRY LAND & INVESTMENT COMPANY, INC., a
Georgia corporation
(CORPORATE SEAL]
By:
Name:
Title:
<PAGE>
EXHIBIT C
---------
to
Credit Agreement
dated as of June 28, 1996
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
First Union National Bank
of Georgia, as Agent
[Address]
Attention:
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation is delivered to
you, in your capacity as Agent, under Section 3.2 of the Credit Agreement
dated as of June ___, 1996 (the "Credit Agreement") by and among Merry Land
& Investment Company, Inc. (the "Borrower"), the Lenders which are, or may
from time to time become, party thereto (collectively, the "Lenders") and
First Union National Bank of Georgia, as Agent for the Lenders.
1. This Notice of Conversion/Continuation is submitted for the
purpose of: (Check one and complete applicable information.)
_ Converting a Prime Rate Loan into a LIBOR Rate Loan
---------------------------------------------------
(a) The aggregate outstanding principal balance of such Loan is
$__________
(b) The principal amount of such Loan to be converted is
$__________. (Complete with an amount equal to $1,000,000 or a whole
multiple of $50,000 in excess thereof.)
(c) The requested effective date of the conversion of such Loan
is _________________. (Complete with a Business Day at least three (3)
Business Days after the date of this Notice.)
(d) The requested Interest Period applicable to the converted
Loan is _______________________. (Complete with a period of one (1), two
(2) or three (3) months.)
_ Converting a LIBOR Rate Loan into a Prime Rate Loan
---------------------------------------------------
(a) The aggregate outstanding principal balance of such Loan is
$______________.
(b) The last day of the current Interest Period for such Loan is
_______________.
(c) The principal amount of such Loan to be converted is
$______________.
(d) The requested effective date of the conversion of such Loan
is ________________. (Complete with a Business Day which is the same date
as that listed in (b) above and which shall be at least three (3) Business
Days after the date of this Notice.)
_ Continuing a LIBOR Rate Loan as a LIBOR Rate Loan
-------------------------------------------------
(a) The aggregate outstanding principal balance of such Loan is
$_____________.
(b) The last day of the current Interest Period for such Loan is
______________.
(c) The principal amount of such Loan to be continued is
$_____________. (Complete with an amount equal to $1,000,000 or an integral
multiple of $50,000 in excess thereof.)
(d) The requested effective date of the continuation of such
Loan is ______________________. (Complete with a Business Day which is the
same date as that listed in (b) above and which shall be at least three (3)
Business Days after the date of this Notice.)
(e) The requested Interest Period applicable to the continued
Loan is _____________________. (Complete with a period of one (1), two (2)
or three(3) months.)
2. The principal amount of all Loans outstanding as of the date
hereof does not exceed the maximum amount permitted to be outstanding
pursuant to the terms of the Credit Agreement.
3. The obligations of the Borrower set forth in the Credit Agreement
and the Loan Documents are valid, binding and enforceable obligations of
the Borrower as of the date hereof, both before and after giving effect to
the conversion or continuation of the Loan requested herein..
4. All of the conditions applicable to the conversion or
continuation of the Loan requested herein as set forth in the Credit
Agreement have been satisfied as of the date hereof and will remain
satisfied to the date of such Loan.
5. No Default or Event of Default exists, and none will exist upon
the conversion or continuation of the Loan requested herein.
6. The representations and warranties of the Borrower under the
Credit Agreement and the other Loan Documents are true and correct in all
material respects as of the date hereof, both before and after giving
effect to the conversion or continuation of the Loan requested herein.
7. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Conversion/Continuation this _____ day of _____________, 19__.
MERRY LAND & INVESTMENT COMPANY, INC., a
Georgia corporation
By:
Name:
Title:
<PAGE>
EXHIBIT D
---------
to
Credit Agreement
dated, as of June 28, 1996
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
ASSIGNMENT AND ACCEPTANCE
--------------------------
Dated __________
Reference is made to the Credit Agreement dated as of June 28, 1996
(as amended, restated, modified or otherwise supplemented from time to
time, the "Credit Agreement") by and among Merry Land & Investment Company,
Inc., a Georgia corporation (the "Borrower"), the Lenders which are, or may
from time to time become, party thereto (collectively, the "Lenders") and
First Union National Bank of Georgia, as Agent for the Lenders.
Capitalized terms which are defined in the Credit Agreement and which are
used herein without definition shall have the same meanings herein as in
the Credit Agreement.
_______________________________________ (the "Assignor") and
________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, as of the
Effective Date (as defined below), a ____% interest in and to the
Commitment and all of the Assignor's related interests, rights and
obligations under the Credit Agreement. This Assignment and Acceptance is
entered pursuant to, and authorized by, Section 11.12 of the Credit
Agreement.
2. The Assignor represents that, as of the date hereof, in each case
without giving effect to assignments which have not yet become effective,
(a) its Total Commitment Percentage is ______%, and (b) the outstanding
principal balance of its Loans is $___________.
3. The Assignor and the Assignee agree that, as of the Effective
Date and after giving effect to this Assignment and Acceptance, their
respective Total Commitment Percentages, Commitment Percentages and
outstanding principal balances of Loans shall be as set forth on SCHEDULE 1
hereto.
4. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any
other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto, other than that the
Assignor is the legal and beneficial owner of the interest being assigned
by it hereunder and that such interest is free and clear of any adverse
claim, (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
its Subsidiaries or the performance or observance by the Borrower or its
Subsidiaries of any of their obligations under the Credit Agreement or any
other instrument or document furnished or executed pursuant thereto, and
(c) attaches the Note delivered to it under the Credit Agreement and
requests that the Borrower exchange such Note for new Notes payable to each
of the Assignor and the Assignee as follows:
Note
Payable to the Order of: Principal Amount of Note:
------------------------ -------------------------
$
$
5. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance, (b) confirms that
it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 6.1(a) thereof
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance
upon the Assignor or any other Lender or Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Credit
Agreement, (d) confirms that it is an Eligible Assignee, (e) appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and the other Loan
Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto, (f) agrees that it will
perform in accordance with their terms all the obligations which by the
terms of the Credit Agreement and the other Loan Documents are required to
be performed by it as a Lender, (g) agrees that it will be bound by the
terms and conditions of the Credit Agreement as if it were a part, thereto
and (h) agrees that it will keep confidential all the information with
respect to the Borrower, furnished to it by the Borrower or the Assignor
other than (i) information required or requested to be disclosed by it
pursuant to regulatory requirements or legal process, (ii) information
requested by and disclosed to its auditors, accountants and attorneys and
(iii) information generally available to the public or otherwise available
to the Assignee on a nonconfidential basis.
6. The effective date for this Assignment and Acceptance shall be
___________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for consent by
the Borrower and the Agent and acceptance and recording in the Register.
7. Upon such consents, acceptance and recording, from and after the
Effective Date, (a) the Assignee shall be a party to the Credit Agreement
and the other Loan Documents to which Lenders are parties and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender under each such agreement, and (b) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement
and the other Loan Documents.
8. Upon such consents, acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the
interest assigned hereby (including payments of principal, interest, fees
and other amounts) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments for periods prior to the Effective
Date or with respect to the making of this assignment directly between
themselves.
9. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A CONTRACT
UNDER SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
By:
Name:
Title:
ASSIGNEE
By:
Name:
Title:
Acknowledged and Consented to:
MERRY LAND & INVESTMENT COMPANY, INC.
By:
Name:
Title:
<PAGE>
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
--------------------------
<TABLE>
<CAPTION>
Outstanding
Total Principal
Commitment Balance of
Percentage Loans
- ----------------------------------------------------------------------
<S> <C> <C>
Assignor
Assignee
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 5.1(c)
MATERIAL ADVERSE CHANGES
None
<PAGE>
SCHEDULE 5.1(f)
INDEBTEDNESS FOR BORROWED MONEY AND SECURED DEBT
------------------------------------------------
<TABLE>
<CAPTION>
BORROWED MONEY
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT AS OF
LENDER RATE MATURITY DATE 5/31/96
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
First Union National Bank of 7.25% 10/02
Georgia, Trustee ($40,000,000)
- -------------------------------------------------------------|
First Union National Bank of 6.875% 11/03
Georgia, Trustee ($40,000,000)
- -------------------------------------------------------------| $240,000,000
First Union National Bank of 6.875% 11/04
Georgia, Trustee ($40,000,000)
- -------------------------------------------------------------|
First Union National Bank of 7.25% 6/05
Georgia, Trustee ($120,000,000)
- ---------------------------------------------------------------------------
Morgan Guaranty Trust Company of
New York, as Trustee for a
Commingled Pension Trust Fund
- -----------------------------------|
The Northwestern Mutual Life
Insurance Company
- -----------------------------------|
CIGNA Property and Casualty
Insurance Company, by CIGNA
Investments, Inc.
- -----------------------------------|
Connecticut General Life Insurance 6.625% $40,000,000 in $120,000,000
Company, by CIGNA Investment, Inc. 1999, 2000 &
- -----------------------------------| 2001
Connecticut General Life Insurance
Company, on behalf of one or more
separate accounts, by CIGNA
Investments, Inc.
- -----------------------------------|
Insurance Company of North America,
by CIGNA Investments, Inc.
- -----------------------------------|
Life Insurance Company of North
America, by CIGNA Investments, Inc.
- ---------------------------------------------------------------------------
First Union National Bank of LIBOR + 6/96 $6,000,000
Georgia 65 bp
- ---------------------------------------------------------------------------
</TABLE>
<PAGE>
SECURED DEBT
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Principal
Maturity Amount as of
Lender Rate Date 5/31/96 Security
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prudential Capital Group 7.75% 10/02 $9,600,000 Mariner
Club
- ---------------------------------------------------------------------------
Margin Loan - Broker variable demand $2,850,000 Marketable
Securities
- ---------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 5.1(g)
LITIGATION
None
<PAGE>
SCHEDULE 5.1(j)
CONTINGENT LIABILITIES
None
<PAGE>
SCHEDULE 5.1(m)
SUBSIDIARIES AND OTHER INTERESTS
Merry Land & Investment Company, Inc. owns 100% of the outstanding
stock of two corporations: Merry Land Apartment Communities, Inc., a
Maryland corporation, and ML Apartments Limited, a Maryland corporation.
Merry Land & Investment, Inc. holds no interests in any other corporations,
partnerships, or other entities.
Merry Land Apartment Communities, Inc. owns 1% of the partnership
interests of and serves as the sole general partner of the following three
limited partnerships, and ML Apartments Limited owns 99% of the partnership
interests of and constitutes the sole limited partner of each of the
following three limited partnerships:
ML Tennessee Apartments LP, a Georgia limited partnership
ML North Carolina Apartments LP, a Georgia limited partnership
ML Texas Apartments LP, a Texas limited partnership
Merry Land Apartment Communities, Inc. manages the leasing, operation,
and development of all of the apartment projects owned by Merry Land &
Investment Company, Inc., ML Tennessee Apartments LP, ML North Carolina
Apartments LP, and ML Texas Apartments LP.
<PAGE>
SCHEDULE 5.1(n)
CERTAIN CONTRACTS
None
<PAGE>
SCHEDULE 5.1(o)
AFFILIATE TRANSACTIONS
None
<PAGE>
SCHEDULE 5.2(A)
ENCUMBRANCES ON REAL PROPERTY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Principal
Maturity Amount as
Lender Rate Date of 5/31/96 Security
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commonwealth of Pennsylvania 8.375% 07/00 $7,413,457 Lakeridge
State Employee's Retirement
System
- ---------------------------------------------------------------------------
Prudential Capital Group 7.75% 10/02 $9,600,000 Mariner
Club
- ---------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 5.2(d)
FLOOD INSURANCE EXCEPTIONS
None.
<PAGE>
SCHEDULE 5.2(g)
INSPECTIONS AND PHYSICAL CONDITION
None
<PAGE>
SCHEDULE 5.2(i)
CONDEMNATION PROCEEDINGS
There is no material pending or, to the knowledge of the Company,
threatened litigation. There is a condemnation proceeding of the
DEPARTMENT OF TRANSPORTATION V.70.386 ACRES OF LAND; AND CERTAIN EASEMENT
RIGHTS; MERRY LAND AND INVESTMENT COMPANIES, INC.; MERRY COMPANIES, INC.
N/K/A BORAL BRICKS, INC.; FIRST UNION NATIONAL BANK OF GEORGIA AS SUCCESSOR
TO GEORGIA RAILROAD BANK AND TRUST COMPANY, INDIVIDUALLY, Superior Court,
Richmond County, Georgia; CA File No. 93-RCCV-702.
This is a condemnation action taking a right of way through the
Company's main clay lands in Richmond County, Georgia. The Department of
Transportation has been in possession of the property since 1991 under a
Right of Entry Agreement. Pursuant to this Agreement, the Department of
Transportation agreed to pay the Company interest on the compensation
ultimately awarded by the Court or agreed upon by the parties at the rate
of 7% per annum from October 7, 1991, until the condemnation proceeding was
filed and then interest at the legal rate thereafter.
The proceeding was filed on July 21, 1993. The Department of
Transportation paid $429,000 into Court as the estimated fair market value
of the property being condemned. Of that amount, $50,000 was paid to Boral
Bricks, Inc., as the estimated value of its rights under the Clay Lease.
The balance of $379,000 was paid to Company. The Company has made the
necessary filings to contest this amount, which it deems inadequate, and
the matter will proceed to a jury if it CANNOT be settled. The final jury
award could be more or less than the amount paid into Court by the
Department of Transportation.
<PAGE>
SCHEDULE 8.2
ENCUMBRANCES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Principal
Maturity Amount as
Lender Rate Date of 5/31/96 Security
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commonwealth of Pennsylvania 8.375% 07/00 $7,413,457 Lakeridge
State Employee's Retirement
System
- ---------------------------------------------------------------------------
Prudential Capital Group 7.75% 10/02 $9,600,000 Mariner
Club
- ---------------------------------------------------------------------------
Margin Loan - Broker variable demand $2,850,000 Marketable
Securities
- ---------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE I
to
Credit Agreement dated
as of June 28, 1996
among
Merry Land & Investment Company, Inc.,
the Lenders party thereto
and
First Union National Bank of Georgia, as Agent
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Commitment
Percentage of Total Commitment
Lender Commitment Loans Percentage
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
First Union National $100,000,000 100% 100%
Bank of Georgia
- ----------------------------------------------------------------------------
</TABLE>
